River Region parent Quorum sold to Texas firm
Published 12:00 am Friday, October 20, 2000
As River Region Health System worked on its new hospital in Vicksburg, its parent company, Quorum, announced an agreement to sell to a Texas-based medical company.
The transaction is not expected to have any local effect.
The announcement was made Thursday in Brentwood, Tenn., Quorum’s home, and in Dallas, where Triad Hospitals Inc. is based.
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The deal involves about $2.4 billion in cash and stock and the assumption of debt.
“As far as we are concerned, it’s business as usual,” said Debbi Brumitt, a spokesman for River Region. “Hospitals are sold every day.”
Quorum, which previously had been a contract hospital management company only, bought Mercy Regional Medical Center from Mercy Health Systems Inc. in 1990 as its first owned hospital.
The name was changed to ParkView Regional Medical Center and a decade of combining local health services, some of it involving litigation, began.
In 1994, The Street Clinic and Family Medical Clinic merged with ParkView to form River Region Medical Corp. In 1997, the physician-owners of the Vicksburg Clinic merged with River Region and then in 1998, River Region took over the Vicksburg Medical Center, including the Vicksburg Hospital.
Capping it all, River Region bought land off U.S. 61 North and broke ground for a $112 million hospital complex. Steel is up and the company has a target date for completing the project in the summer of 2002.
Under the terms of the agreement worked out by the boards of Quorum and Triad, Quorum stockholders will receive $3.50 in cash and 0.4107 share of Triad common stock for every share of Quorum stock. The stock portion of the deal will be tax free to Quorum stockholders.
When the deal is complete, sometime in the first half of 2001, Triad stockholders will own about 51 percent of the resulting company and Quorum stockholders will own about 49 percent.
Although the boards of the two companies have approved the sale, it still must receive approval from the stockholders of the two companies, antitrust clearance and the receipt by Triad of a private letter ruling from the Internal Revenue Service that the transaction will not alter the tax-free nature of Triad’s spin off from HCA Health Care Corp. in 1999.
HCA formerly owned the Vicksburg Hospital business, transferred it to HealthTrust which later merged with Columbia/HCA.
Brumitt’s comment was echoed by James Dalton Jr., an official of Quorum, who spoke in a conference call for regional operations managers Thursday.
“Our construction projects will continue as they are,” he said, adding any new projects already in the budgets will continue.
Dalton also said Quorum officials believed the employee salary and benefit packages offered by Triad will be substantially equal to those from Quorum.
Dr. Briggs Hopson, a surgeon at The Street Clinic and a member of the board of directors of River Region, said he doubted any changes would be made, or at least any time soon.
“I don’t think it will affect” the new hospital rising of U.S. 61 North, he said, adding that patients and staff won’t see any differences either.
“If I were buying a business, I would want to go in and look at it before I changed anything,” Hopson said.