Health Care Deal News: Spotlight on Hospitals - August 2012

The hospital acquisition market has been a little slow, and we are not sure if acute care operators are trying to figure out the impact of the Supreme Court ruling, are worried about the political climate and the November elections, or are just not finding the right opportunities.  In one small deal, MedCath Corporation is selling its 53.3% interest in Bakersfield Heart Hospital, a 47-bed facility in Bakersfield, California.  The price, $38.1 million, included some secured loans on the building.  Cardiovascular Care Group, based in Nashville, Tennessee, was the buyer.  This was the last of 10 hospitals that MedCath had to sell as part of its plan of dissolution.   

With Medicare reimbursement levels still somewhat lucrative (at least for now), there has been some activity in the long-term acute care (LTAC) hospital side of the business.  Restora Healthcare Holdings, which was recently formed and funded by private equity firm HealthCap of Dallas, Texas, just purchased Trillium Specialty Hospitals, which operates two LTACs in Arizona (Mesa and Sun City),  together with two transitional care facilities, with a total of 240 beds.  GE Healthcare provided the secured real estate financing and Healthcare Finance Group provided the unsecured senior debt. No other financial information was disclosed.

In another deal, privately owned Aviv REIT purchased a 30-bed LTAC in Indiana for $8.4 million and leased it to Physician’s Hospital, LLC, which operates 12 LTACs and other health care facilities in Indiana.  The triple net lease has a 15-year term, and the initial cash lease yield is 10.0% with annual escalators of 3.0%.................Want to read more? Click here for a free trial to The Health Care M&A Information Source and download the current issue today