River Region parent firm selling|[02/05/07]
Published 12:00 am Monday, February 5, 2007
The parent company of River Region Health System announced a pending sale this morning.
No effect here was anticipated.
Triad Hospitals Inc., based in Plano, Texas, will be merged with affiliates of CCMP Capital Advisors and GS Capital Partners in a transaction valued at approximately $6.4 billion, which includes $1.7 billion in Triad debt.
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All Triad common stock will be sold to the new owners for $50.25 per share in cash under the deal unanimously approved by Triad’s board of directors.
The effect of a total buyout would be to make ownership private, meaning no more public trading of shares.
News of the merger sent Triad stock up 15 percent to $49.89 per share this morning.
Triad had been under intense questioning by shareholders, some of whom had been complaining that returns on their investments were not keeping pace with other health-care companies. Shares had sold for as little as $36.44 in the past year. There was no direct indication the pressure led to the merger.
River Region operations here, which include multispecialty clinics and other outpatient facilities, are centered at River Region Medical Center, completed five years ago this month on U.S. 61 North.
When built, the $123 million hospital campus was the largest single hospital project in Mississippi history.
As owner, Triad had succeeded Quorum Inc., based in Nashville. Quorum had acquired the former Mercy Regional Medical Center from the Religious Sisters of Mercy of St. Louis and changed the name to ParkView Regional Medical Center.
Before the new hospital was built, Quorum had also merged with Vicksburg Medical Center and Vicksburg Clinic, which was privately owned by local physicians before being sold to Columbia HCA.
James D. Shelton, Triad CEO, said the deal was “in the best interests of the company and our stockholders.” Shelton is identified on disclosure forms as owning more than 400,000 shares last March.
He continued: “The decision to take the company private is the culmination of a strategic planning process initiated several months ago to explore the various options available to enhance shareholder value. We are pleased that this transaction appropriately recognizes the importance of Triad’s collaborative approach to working with the many constituencies that we serve while providing our stockholders with a cash premium for their investment in Triad.”
The transaction is subject to closing conditions, including the approval of Triad’s stockholders, regulatory approvals and the satisfaction of other closing conditions. There is no financing condition to consummate the transaction. The transaction is expected to close promptly following the satisfaction of all closing conditions. Triad will postpone its 2007 meeting.
Triad, through affiliates such as River Region, owns and manages hospitals and ambulatory surgery centers, many in smaller cities such as Vicksburg. Overall, Triad operates 54 hospitals and 13 ambulatory surgery centers in 17 states with 9,855 licensed beds. In addition, Triad provides hospital management, consulting and advisory services to more than 180 independent hospitals and health systems.
CCMP Capital Advisors is a private equity firm formed in August 2006 by the former buyout/growth equity investment team of JPMorgan Partners, a private equity division of JPMorgan Chase. CCMP Capital’s investment team has invested over $10 billion in over 375 buyout and growth equity transactions since 1984. In addition to health care, the target markets are consumer, retail and services, energy, industrials and media and telecommunications.
GS Capital Partners dates to 1992 and is an outgrowth of Goldman Sachs, founded in 1869 as an investment banking firm.