HCA Inc., the nation’s largest hospital chain, has announced the execution of a definitive merger agreement with Bain Capital, Kohlberg Kravis Roberts & Co., and Merrill Lynch Global Private Equity, under which affiliates of the private equity sponsors and HCA founder Thomas F. Frist, Jr., MD, will acquire HCA. The transaction, valued at approximately $33 billion, includes the assumption or repayment of approximately $11.7 billion of debt. 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, the last trading day prior to press reports of rumors regarding a potential acquisition of HCA.
The board of directors of HCA has approved the merger agreement and has resolved to recommend that HCA’s stockholders adopt the agreement. Pending the receipt of stockholder approval, as well as satisfaction of other closing conditions, the transaction is expected to be completed in the fourth quarter of 2006.
“It makes sense for a company like HCA to operate in private,” Sheryl Skolnick, an analyst with CRT Capital Group LLC in Stamford, Conn., said in a July 20 Bloomberg interview. “They don’t use their equity for acquisitions or compensation. They are more likely to need to shed assets.”
Frist, who founded the company along with his father, physician Thomas Frist, Sr., owns 16.9 million shares, or 4.4 percent, according to data compiled by Bloomberg. His brother, Bill Frist, R-Tenn., Senate majority leader, said in January that he sold his HCA shares in 2005.
Read the HCA press release.
