Continuously serving Kosciusko County since 1854
Triad Hospitals Inc. and Quorum Health Group Inc. jointly announced today they have signed a definitive agreement for Triad to acquire Quorum for approximately $2.4 billion in cash, stock and the assumption of debt.
Kosciusko Community Hospital is owned by Quorum.
The transaction will create the third-largest investor-owned hospital company in the United States, with 53 hospitals, 14 ambulatory surgery centers and 9,479 licensed beds, and a leading hospital company focused on small cities and mid-sized markets.
The boards of directors of both Triad and Quorum have unanimously approved the proposed transaction, which is subject to customary conditions, including Quorum and Triad shareholder approval and antitrust clearance. The transaction also is conditioned upon Triad's receipt 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 in May 1999 and is conditioned upon the receipt of necessary financing.
Merrill Lynch & Co. has committed, subject to customary conditions, to underwrite the entire $1.7 billion of debt needed to fund the cash purchase price and the refinancing of existing debt. The transaction is expected to be completed in the first half of 2001.
Kosciusko Community Hospital and six other area hospitals are owned by Quorum. Quorum, based in Brentwood, Tenn., employs approximately 5,000 people through the Lutheran Health Network at its area hospitals.
In August, the company announced it was exploring various alternatives to ownership and financing options in anticipation of a multimillion-dollar lawsuit settlement Quorum Health Group is expecting within a year.
Those alternatives included the possibility of a merger, sale or recapitalization.
At that time, Wayne Hendrix, KCH CEO, said he was "not too sure" the settlement is the only reason Quorum is looking at alternatives and the lawsuit goes back many years.
Quorum was named in a civil Medicare fraud lawsuit stemming from a whistleblower's complaints. The lawsuit was unsealed in 1998 and alleges Quorum filed inflated Medicare cost reports. The settlement could be up to to $200 million, but Quorum didn't announce any settlement figures.
Quorum was created in 1989 when HCA Management Co. was spun off to a group of investors and employees by Hospital Corp. of America.
Quorum bought KCH in 1999.
