Press release from CNW Group
Medical Facilities Corporation Announces Agreement to Acquire 51% Interest in Arkansas Surgical Hospital L.L.C.
Tuesday, November 13, 2012
Medical Facilities Corporation Announces Agreement to Acquire 51% Interest in Arkansas Surgical Hospital L.L.C.14:08 EST Tuesday, November 13, 2012TORONTO, Nov. 13, 2012 /CNW/ - Medical Facilities Corporation ("Medical Facilities" or the "Corporation") (TSX: DR) announced today that it has entered into a definitive agreement to acquire a 51% interest in the Arkansas Surgical Hospital, L.L.C. ("ASH"). ASH operates the Arkansas Surgical Hospital, a physician-owned specialty hospital located in North Little Rock, Arkansas that provides advanced medical and surgical treatment for patients suffering from disorders of the spine and chronic pain.The Corporation is acquiring its interest in ASH for a purchase price of approximately US$36.2 million, subject to customary adjustments. The current physician-owners of ASH will retain a 49% interest (5% of which will be exchangeable for common shares of Medical Facilities). The acquisition is scheduled to be completed on November 30, 2012 after close of business and is subject to customary closing conditions. The transaction has been approved by the respective boards of the Corporation and ASH and is accretive to the Corporation.Dr. Donald Schellpfeffer, the Chief Executive Officer of Medical Facilities, said: "We are excited to add the Arkansas Surgical Hospital to the Corporation's group of hospitals, which currently includes a total of four (4) specialty surgical hospitals located in South Dakota and Oklahoma, as well as an ambulatory surgery center in California. Arkansas Surgical Hospital is highly regarded for the quality of its care and services. This transaction is consistent with our stated strategy to grow distributable cash by identifying and executing accretive acquisitions in what remains a highly fragmented industry. The acquisition of ASH provides significant diversification benefits and is immediately accretive to Medical Facilities. We expect that this acquisition will help us build on Medical Facilities' strong momentum."TRANSACTION BENEFITSThe acquisition would provide the following key benefits to Medical Facilities:ASH is a successful and growing specialty hospital, highly regarded for the quality of its care and service and the talents of its management, medical professionals and employees, consistent with the profile and strengths of Medical Facilities' other hospitals.Accretion of approximately 6% to free cash flow for the 12 months ended September 30, 2012 excluding any potential synergies that might be realized.Enhanced cash flow stability through a broadened geographic footprint and diversification of payor base and case mix.Increased scale and expanded geographic scope will enhance the Corporation's ability to identify and execute on future acquisition opportunities by increasing its profile and through an expanded network of physician contacts.About Medical FacilitiesMedical Facilities owns controlling interests in four specialty surgical hospitals, located in South Dakota and Oklahoma, as well as an ambulatory surgery center in California. The specialty 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 ambulatory surgery center specializes in outpatient surgical procedures, with patient stays of less than 24 hours. Medical Facilities is structured so that a majority of its free cash flow from operations is distributed to the holders of its common shares in the form of a monthly dividend. For more information, please visit www.medicalfacilitiescorp.ca.NON-IFRS MEASURESCertain financial information contained in this press release, including references to distributable cash and EBITDA, are not standard measures under International Financial Reporting Standards ("IFRS") in Canada and may not be comparable to similar measures presented by other entities. These measures are considered to be important measures used by the investment community to assess the source and sustainability of the Corporation's cash distributions and should be used to supplement other performance measures prepared in accordance with IFRS. For further information on non-IFRS financial measures used by the Corporation and a reconciliation of such measures to IFRS financial measures, see the annual and quarterly Management's Discussion and Analysis and the notes to the annual and quarterly financial statements filed by the Corporation with Canadian securities regulators.FORWARD LOOKING STATEMENTSCertain statements in this press release may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this press release, such statements use such words as "may," "will," "expect," "anticipate," "project," "believe," "plan" and other similar terminology. The risks and uncertainties are detailed from time to time in reports filed by the Corporation with the securities regulatory authorities in all of the provinces and territories of Canada to which recipients of this press release are referred for additional information concerning the Corporation, its prospects and the risks and uncertainties relating to the Corporation and its prospects. New risk factors may arise from time to time and it is not possible for management to predict all of those risk factors or the extent to which any factor or combination of factors may cause actual results, performance and achievements of the Corporation to be materially different from those contained in forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as prediction of actual results. The forward-looking information contained in this press release is current only as of the date of this press release. There should not be an expectation that such information will in all circumstances be updated, supplemented or revised whether as a result of new information, changing circumstances, future events or otherwise.SOURCE: Medical Facilities CorporationFor further information: Michael Salter Chief Financial Officer Medical Facilities Corporation (416) 848-7380 or 1-877-402-7162 email@example.com Salvador Diaz Investor Relations TMX Equicom (416) 815-0700 or 1-800-385-5451 ext. 242 firstname.lastname@example.org