HCA Stockholders to Receive $51 per Share; Transaction Valued at $33
Billion
NASHVILLE, Tenn., July 24 /PRNewswire-FirstCall/ -- HCA (NYSE: HCA), a
leading health care services company, and Bain Capital, Kohlberg Kravis
Roberts & Co., and Merrill Lynch Global Private Equity announced today the
execution of a definitive merger agreement under which affiliates of the
private equity sponsors and HCA Founder Dr. Thomas F. Frist, Jr. will
acquire HCA in a transaction valued at approximately $33 billion, including
the assumption or repayment of approximately $11.7 billion of debt.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050825/CLTH069LOGO)
Under the terms of the agreement, HCA stockholders will receive $51 in
cash for each share of HCA common stock they hold, representing a premium
of approximately 18% to HCA's closing share price on July 18, 2006, the
last trading day prior to press reports of rumors regarding a potential
acquisition of HCA.
The board of directors of HCA, on the unanimous recommendation of a
special committee comprised entirely of disinterested directors, has
approved the merger agreement and has resolved to recommend that HCA's
stockholders adopt the agreement.
In the event the transaction closes, members of HCA's senior management
team have also agreed to reinvest a portion of their HCA equity into the
acquiring entity or an affiliate thereof. Dr. Thomas Frist, Jr. and certain
related persons have reached agreements to vote their shares in favor of
the transaction.
Jack O. Bovender, Jr., HCA Chairman and CEO, said, "After careful
analysis, the special committee and the board have endorsed this
transaction as being in the best interests of our shareholders. We are very
pleased to have an experienced group of investors who are committed to
maintaining our company's culture of a patients-first approach to high
quality, compassionate care. They are also committed to the welfare of our
colleagues across the company who carry out that mission every day. These
are the principles on which HCA was founded."
Pending the receipt of stockholder approval and expiration of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as well as satisfaction of other customary closing conditions, the
transaction is expected to be completed in the fourth quarter of 2006. The
transaction will be financed through a combination of equity contributed by
the private equity consortium, Dr. Thomas Frist, Jr., and members of
management, and debt financing that has been committed by Bank of America,
Citigroup Global Markets, JPMorgan, and Merrill Lynch Capital Corporation,
subject to customary conditions.
There is no financing condition to the obligations of the private
equity consortium to consummate the transaction.
Under the merger agreement, HCA may solicit superior proposals from
third parties during the next 50 days. In accordance with the agreement,
the board of directors of HCA, through its special committee and with the
assistance of its independent advisors, intends to actively solicit
superior proposals during this period. HCA advises that there can be no
assurance that the solicitation of superior proposals will result in an
alternative transaction. HCA does not intend to disclose developments with
respect to the solicitation process unless and until its board of directors
has made a decision.
"This is a truly landmark deal, and we are pleased to partner with the
management team led by Jack Bovender, Dr. Thomas Frist, Jr. and our fellow
equity sponsors," said Stephen Pagliuca, a Managing Director at Bain
Capital. "HCA is the largest and most sophisticated operator in the U.S.
hospital industry, delivering high quality and cost effective healthcare as
well as a track record of consistent growth. We look forward to putting our
extensive healthcare experience to work in order to support management in
growing this outstanding company."
Michael Michelson, a Member of KKR, stated, "HCA provides world class
patient care on a unique scale in this country and is an indispensable part
of the communities it serves. We are delighted to be joining with HCA's
talented management, Dr. Thomas Frist, Jr., and our private equity partners
to continue to build the company's franchise of high quality clinical care.
KKR's experienced healthcare team looks forward to providing strong support
for HCA's future growth, including continuing to invest substantial capital
in its facilities."
Dr. Thomas Frist, Jr. said of the pending transaction, "This
transaction will position the company to continue its tradition of
high-quality service provided with genuine caring. In addition, the
transaction will position the company and its employees for sustained
future success."
Credit Suisse Securities (USA) LLC and Morgan Stanley & Co.
Incorporated are acting as financial advisors to the special committee.
Credit Suisse and Morgan Stanley have each delivered a fairness opinion to
the special committee. Shearman & Sterling LLP is acting as legal advisor
for the special committee and Bass Berry & Sims PLC is acting as legal
advisor for HCA.
Merrill Lynch & Co. acted as lead M&A advisor, and Banc of America
Securities LLC, Citigroup Global Markets, and JPMorgan acted as M&A
advisors, to the private equity consortium. Simpson Thacher & Bartlett LLP
is acting as legal advisor to the private equity consortium.
The transaction does not require the consent of the Company's unsecured
noteholders. It is currently intended that substantially all of the
Company's 8.850% Medium Term Notes due 2007, 7.000% Notes due 2007, 7.250%
Notes due 2008, 5.250% Notes due 2008 and 5.500% Notes due 2009 (or an
equivalent amount of the Company's other existing notes) will either be
tendered for or repaid. The transaction is not, however, conditioned upon
any such tender or repayment. The Company's remaining unsecured notes are
expected to remain outstanding and will not be equally and ratably secured
with the new debt raised to finance the transaction.
About HCA
HCA Inc. is a holding company whose affiliates own and operate
hospitals and related health care entities. The term "affiliates" includes
direct and indirect subsidiaries of HCA Inc. and partnerships and joint
ventures in which such subsidiaries are partners. At June 30, 2006, these
affiliates owned and operated 176 hospitals, 92 freestanding surgery
centers and facilities which provided extensive outpatient and ancillary
services. Affiliates of HCA Inc. are also partners in joint ventures that
own and operate seven hospitals and seven freestanding surgery centers
which are accounted for using the equity method. The Company's facilities
are located in 21 states, England and Switzerland.
About Bain Capital
Bain Capital is one of the world's leading private investment firms,
with over 20 years of experience in management buyouts, and offices in
Boston, New York, London, Munich, Hong Kong, Shanghai and Tokyo. For more
information, visit http://www.baincapital.com.
About KKR
KKR is one of the world's oldest and most experienced private equity
firms specializing in management buyouts, with offices in New York, Menlo
Park, California, London, Paris, Hong Kong and Tokyo. For more information,
visit http://www.kkr.com.
About Merrill Lynch Global Private Equity
Merrill Lynch Global Private Equity is the private equity investment
arm of Merrill Lynch & Co, Inc. For more information visit http://www.ml.com.
Important Additional Information will be Filed with the SEC
In connection with the proposed merger, HCA will file a proxy statement
with the Securities and Exchange Commission. INVESTORS AND SECURITY HOLDERS
ARE ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE
IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER AND THE PARTIES
THERETO. Investors and security holders may obtain a free copy of the proxy
statement (when available) and other documents filed by HCA at the
Securities and Exchange Commission's Web site at http://www.sec.gov. The
proxy statement and such other documents may also be obtained for free from
HCA by directing such request to HCA Inc., Office of Investor Relations,
One Park Plaza, Nashville, Tennessee 37203, telephone: (615) 344-2068.
HCA and its directors, executive officers and other members of its
management and employees may be deemed to be participants in the
solicitation of proxies from its stockholders in connection with the
proposed merger. Information concerning the interests of HCA's participants
in the solicitation, which may be different than those of HCA stockholders
generally, is set forth in HCA's proxy statements and Annual Reports on
Form 10-K, previously filed with the Securities and Exchange Commission,
and in the proxy statement relating to the merger when it becomes
available.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements based on current
HCA management expectations. Those forward-looking statements include all
statements other than those made solely with respect to historical fact.
Numerous risks, uncertainties and other factors may cause actual results to
differ materially from those expressed in any forward-looking statements.
These factors include, but are not limited to, (1) the occurrence of any
event, change or other circumstances that could give rise to the
termination of the merger agreement; (2) the outcome of any legal
proceedings that may be instituted against HCA and others following
announcement of the merger agreement; (3) the inability to complete the
merger due to the failure to obtain stockholder approval or the failure to
satisfy other conditions to completion of the merger, including the receipt
of stockholder approval and expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976; (4) the failure to
obtain the necessary debt financing arrangements set forth in commitment
letters received in connection with the merger; (5) risks that the proposed
transaction disrupts current plans and operations and the potential
difficulties in employee retention as a result of the merger; (6) the
ability to recognize the benefits of the merger; (7) the amount of the
costs, fees, expenses and charges related to the merger and the actual
terms of certain financings that will be obtained for the merger; and (8)
the impact of the substantial indebtedness incurred to finance the
consummation of the merger. Many of the factors that will determine the
outcome of the subject matter of this press release are beyond HCA's
ability to control or predict. HCA undertakes no obligation to revise or
update any forward-looking statements, or to make any other forward-looking
statements, whether as a result of new information, future events or
otherwise.
SOURCE HCA
 back to top
Related links:
http://www.hcahealthcare.com
http://www.baincapital.com http://www.kkr.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20050825/CLTH069LOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Investors, Mark Kimbrough, 615-344-2688, or
Media, Jeff Prescott, +1-615-344-5708, both of HCA
|
