Heath care services provider MedCath Corporation (MDTH) has inked a definitive deal to jettison substantially all the assets of its Kingman, Arizona-based Hualapai Mountain Medical Center (“HMMC”) to Kingman Regional Medical Center (“KRMC”). The sale also includes 18.6 acres of adjacent undeveloped land.
MedCath noted that it will close the 70-bed facility by September 30, subject to regulatory requirements. The transaction is subject to the approval of MedCath shareholders and other customary closing conditions. MedCath will hold a special meeting of stockholders on September 22. The company expects to book total net proceeds of roughly $42 million from the divestiture.
MedCath stated that it has notified the employees at HMMC about the sale and they are being given termination notice. The company will offer severance to the eligible employees if they are not hired by KRMC.
KRMC, for its part, has stated that it will re-open HMMC in a limited capacity and plans to offer employment to the terminated employees based on local patient demand for hospital services.
MedCath provides high acuity health care services and operates 4 hospitals with a total of 366 licensed beds. It owns and operates specialty hospitals that provide diagnosis and treatment of cardiovascular diseases.
This divestiture of HMMC is MedCath’s tenth transaction since the formation of a “Strategic Options Committee” in March 2010 to consider the sale either of the entire company or its assets. The company has already sold hospitals in Arkansas, New Mexico, South Dakota and Texas.
MedCath, on August 1, 2011, completed the sale of its equity interest in Arkansas Heart Hospital and divested substantially all the assets of Heart Hospital of New Mexico. Results of these entities were included in its recently released third-quarter fiscal 2011 earnings report.
MEDCATH CORP (MDTH): Free Stock Analysis Report
Zacks Investment Research
