Nobilis acquires 50.1% of Elite Surgical Affiliates' 3 ASCs, 1 surgical hospital for $60M: 5 things to know

Nobilis Health acquired 50.1 percent ownership in Elite Surgical Affiliates' three ASCs and one surgical hospital to complete an integration of the company.

"We believe the acquisition and integration of Elite will result in a series of benefits for the Nobilis system, contained in four key areas: the ability to leverage best practices from both companies and generate operational efficiencies, the opportunity to improve conversion through the substantial increase in referral-based business, the resources to expand marketing services to physicians newly aligned with our system and the resources to further strengthen Nobilis' footprint within the Houston market," said Kenneth Efird, Nobilis president.

Here are five things to know:

1. Nobilis purchased an ownership stake in the surgical facilities for around $60 million, financed through the company's current credit facility, cash, seller's note and stock. The company's credit facility accounts for $50 million; Nobilis paid $6.1 million in cash and $3.5 million with the seller's note. BBVA continued as the lead arranger of the existing credit facility.

2. Trailing 12-month revenue for the acquired facilities for the period ended Sept. 30 was $49 million. Adjusted EBITDA reached $30.3 million.

3. Post-acquisition, Nobilis expects to report $2 million of operating efficiencies from the consolidation of one Elite ASC with an existing Nobilis ASC, which are currently located at the same address. The company projects an increase in productivity, lower staffing requirements and a reduced operating cost overtime as it leverages the expanded platform of facilities.

4. With the acquisition, Nobilis will have 13 locations in the Houston market comprising nine surgical facilities and four clinics. The acquisition also adds 76 physicians to the Nobilis network.

5. Ten of the new locations operate under in-network contracts with all major payers.

"This transition is significantly larger than any of our previous acquisitions and is a major stride toward the company's goal to derive most of its revenue from in-network managed care contracts," said Nobilis CEO Harry Fleming. "Not only is this transaction accretive to earnings, the expanded platform of facilities and high-quality providers also enhances the company's ability to deliver outstanding, cost-effective healthcare to our patients."

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