Mr. Jason Redman reports
MEDICAL FACILITIES CORPORATION ANNOUNCES SALE OF BLACK HILLS SURGICAL HOSPITAL, LLP
Medical Facilities Corp. has entered into a definitive agreement to sell one of its specialty surgical hospitals, Black Hills Surgical Hospital LLP (BHSH), located in Rapid City, S.D., to Sanford Health. The proposed transaction is structured as a merger in which Sanford would acquire 100 per cent of the equity securities of BHSH for a total purchase price of $194-million, subject to customary purchase price adjustments. The transaction is expected to yield gross proceeds of approximately $105.2-million for Medical Facilities' 54.22-per-cent ownership share of BHSH. Medical Facilities' minority partner in BHSH, Black Hills Surgical Physicians LLC, is also participating in the transaction. The transaction is expected to close within the week. All amounts are expressed in United States dollars.
"The sale of Black Hills Surgical Hospital will be effected at a material premium to current trading levels and unlock significant value for Medical Facilities' shareholders," said Jason Redman, president and chief executive officer of Medical Facilities. "This transaction aligns with our strategic direction, allowing us to better focus on our remaining core assets and continue delivering high-quality health care services in our key markets. Additionally, the sale strengthens our balance sheet and should provide us with the flexibility to continue creating value for our shareholders."
Michael Gisser, chairman of the board of directors of Medical Facilities, noted: "We are proud to have played a role in building BHSH into one of the top orthopedic hospitals in the United States. In particular, it has been an honour to partner with the exceptional professionals at BHSH over the years. Their staff and surgeons are indeed second to none."
For the most recent fiscal year ended Dec. 31, 2023, BHSH generated revenue of $106-million and income from operations of $17.9-million, representing 23.8 per cent and 26.7 per cent of Medical Facilities' consolidated facility service revenue and income from operations, respectively.
The corporation is currently evaluating various alternatives for the majority of the anticipated net proceeds, including repurchasing shares under the corporation's normal course issuer bid, making a substantial issuer bid and/or making distributions to shareholders.
About Medical Facilities Corp.
Medical Facilities, in partnership with physicians, owns a portfolio of highly rated, high-quality surgical facilities in the United States. Medical Facilities' ownership includes controlling interests in four specialty surgical hospitals located in Arkansas, Oklahoma and South Dakota, and an ambulatory surgery centre (ASC) located in California. The specialty surgical hospitals perform scheduled surgical, imaging, diagnostic and other procedures, including primary and urgent care, and derive their revenue from the fees charged for the use of their facilities. The ASC specializes in outpatient surgical procedures, with patient stays of fewer than 24 hours.
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