Health Care Deal News: Spotlight on Hospitals- January 2013

Houston, Texas-based University General Health System (OTCQB: UGHS) took aim at the Dallas, Texas market and acquired South Hampton Community Hospital there. The $30 million deal, includes cash and $28.5 million in new debt that comes in the form of a 10-year loan at a 4.25% interest rate with a 20-year amortization through Texas-based First National Bank. University General expects to invest about $1 million in capital improvements to South Hampton Community, which has 270 physicians on staff and an affiliated 22,000 square foot medical office building that is 55% occupied. The buyer estimated 2013 cash flow from this transaction will be $15 million (estimated EBITDA) on estimated revenue of $40 million.

The New York Westchester Square Medical Center in the Bronx, New York, was slated to close in 2009 due to its Chapter 11 bankruptcy status, but was delayed by a lawsuit filed six years ago. Enter Montefiore Medical Center, also in the Bronx, which agreed to pay $14 million for the troubled facility. Montefiore has expanded dramatically in recent years by taking over other failing medical facilities and purchasing a number of medical practices. As a condition of the sale to Montefiore, Westchester Square will become an ambulatory care facility with an urgent care center, outpatient surgical facilities and comprehensives primary care services. In order for New York Westchester Square to avoid a liquidity crisis, the deal must close before March 31, 2013........Want to read more? Click here for a free trial to The Health Care M&A Information Source and download the current issue today