Medical Facilities Corp., NueHealth form joint venture, acquire 7 ASCs from Meridian Surgical Partners — 6 things to know

Toronto-based Medical Facilities Corporation formed a joint venture with Leawood, Kan.-based NueHealth and acquired seven ASCs from Meridian Surgical Partners, based in Brentwood, Tenn.

Here are six things you should know:

1. The joint venture is called MFC Nueterra Holding Company and will be majority owned by Medical Facilities Corp.

2. The new entity will purchase seven ASCs from Meridian Surgical Partners for $46.5 million; Medical Facilities Corp. will pay their portion of the total purchase price through a draw on its credit facility and cash. The transaction is expected to close on or before March 2018.

3. The joint venture will acquire ownership interests in the following ASCs:

  • Brookside Surgery Center (Battle Creek, Mich.)
  • Central Arkansas Surgical Center (Russellville, Ark.)
  • City Place Surgery Center (Creve Coeur, Mo.)
  • Eastwind Surgical (Westerville, Ohio)
  • Miracle Hills Surgery Center (Omaha, Neb.)
  • Riverview Ambulatory Surgical Center (Kingston, Pa.)
  • Two Rivers Surgery Center (Eugene, Ore.)

For the 12 months ended on Sept. 30, 2017, net revenue for the acquired centers hit $35.6 million and EBITDA margins were in the mid-20s. The centers are expected to be accretive to the company's current operations.

"These initial seven surgical centers have established presence in their communities, skilled physicians and an attractive payer mix," said Robert Horrar, president and CEO of Medical Facilities Corp. "Through the joint venture we have the ability to acquire additional ambulatory surgery centers and build synergies throughout the network."

4. Post-acquisition, MFC Nueterra will own 53 percent equity interest in the centers, with NueHealth providing day-to-day management and operations, such as accounting, materials management, payer contracting, benefits administration and billing and collections.

5. The combined centers sold have 26 operating and procedure rooms and provide orthopedic surgery, neurosurgery and pain management services.

6. Capital Advisors served as financial advisor to Meridian during the transaction.

© Copyright ASC COMMUNICATIONS 2019. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.

 

Top 40 Articles from the Past 6 Months