Full Release
Nobilis Health Acquires Majority Ownership Interest in Elite Surgical Affiliates' Portfolio of 3 ASCs and 1 Surgical Hospital November 16, 2017 HOUSTON, Nov. 16, 2017 /PRNewswire/ -- Nobilis Health Corp. (NYSE American: HLTH) ("Nobilis" or the "Company") today announced the acquisition of a 50.1% ownership interest in Elite Surgical Affiliates' ("Elite") portfolio of three ambulatory surgery centers (ASCs) and one surgical hospital in the greater Houston area (the "Acquisition"). Key Highlights of the Acquisition A purchase price of approximately $60 million financed through an expansion of Nobilis' current credit facility ($50 million), cash ($6.1 million), seller note ($3.5 million), and stock ($0.5 million). The acquired facilities' trailing twelve months revenue and adjusted EBITDA for the period ended September 30, 2017, were $49.0 million and $30.3 million, respectively. Nobilis projects approximately $2 million of operating efficiencies resulting from the consolidation of one Elite ASC with one existing Nobilis ASC currently co-located at the same address. Nobilis expects increased productivity, lower staffing requirements, and reduced operating costs over time as it leverages its expanded platform of facilities. Following the Acquisition, Nobilis will have 13 locations (nine surgical facilities and four clinics) in the Houston market. Ten of these locations will operate under in-network contracts with all of the major commercial payors. Harry Fleming, Nobilis' CEO, stated, "This acquisition represents a strategic opportunity to enhance Nobilis' in-network revenue and adds 76 physician partners to our existing network of surgeons in the Houston market. This transaction is significantly larger than any of our previous acquistions and is a major stride toward the Company's goal to derive most of its revenue from in-network managed care contracts. Not only is this transaction accretive to earnings, the expanded platform of facilities and high-quality providers also enhances the Company's ability to deliver outstanding, cost-effective healthcare to our patients and communities." Kenneth Efird, Nobilis' President, stated, "We believe the acquisition and integration of Elite will result in a series of benefits for the Nobilis system, contained in four key areas: the ability to leverage best practices from both companies and generate operational efficiencies, the opportunity to improve conversion through the substantial increase in referral-based business, the resources to expand marketing services to physicians newly aligned with our system, and the resources to further strengthen Nobilis' footprint within the Houston market." Expansion of Credit Facility Nobilis funded the acquisition through a $50 million expansion of its existing credit facility with BBVA continuing as lead arranger. Additional Matters JMP Securities, LLC served as financial advisor to Nobilis for the Acquisition. Dr. Donald L. Kramer retired from the Nobilis Board of Directors. Harry Fleming will take over as Chairman of the Board effective today. He will maintain his CEO title and will serve in an executive chairman capacity. "I want to thank Dr. Kramer on behalf of the Board and the management team. He has built strong fundamentals upon which we can continue to grow our operations and increase shareholder value," said Harry Fleming.