HCA Inc., which owns and operates 172 hospitals and 95 freestanding ambulatory surgery centers, has announced that shareholders have approved the proposed merger agreement providing for the acquisition of HCA by an investor group including Bain Capital, Kohlberg Kravis Roberts & Co., Merrill Lynch Global Private Equity, HCA founder Thomas F. Frist, Jr., MD, and HCA management. Valued at $33 billion, this is the largest leveraged buyout in U.S. history, reports The Tennessean. Jack O. Bovender, Jr., who has invested $20 million in the deal, will remain as chairman and CEO of the privately held HCA. Bovender said that HCA won’t have to sell hospitals to pay debt, but that the company will sell poorly performing hospitals or those that are no longer part of the company’s strategic plan while looking for other hospitals to buy.
In an interview with The Tennessean, Bovender talked about the advantages of operating HCA as a private company: “If you look at the hospital industry over time, and you look at the demographics that will drive volumes, I think the long-term outlook, both investor-owned and not-for-profit, is very sanguine. I think we have a long-term positive outlook, but as has always been the case with hospitals, you have ups and downs with that, and the public market is not tolerating those kinds of ups and downs. They’re very concerned about volumes and the uninsured, and that’s as you well know pushed our performance down the past year and pushed the value of the stock down. Private equity is much more willing to take a longer viewpoint and not be influenced by these ups and downs of the operating characteristics of the company.” Read the HCA announcement.
