After roughly seven months of negotiations, HCA Inc. has completed the $1.125 billion transaction of Health MidWest in Kansas City.
The price tag includes $183 million of debt and leases assumed by HCA. The aggregate cash paid by HCA was roughly $855 million.
The Nashville-based hospital company has agreed to commit at least $450 million in capital expenditures over the next five years. And, two charitable foundations—one in Missouri and one in Kansas—will be created from the proceeds of the sale.
Allocation of the net proceeds sparked a long legal battle in Health MidWest’s hometown. In a press release issued today, HCA Chief Executive Jack Bovender said: “This has been a comprehensive, thorough process with a lot of community participation. We are ready to get to work to improve these hospitals through significant capital infusion and by making long term operational improvements.”
The transaction, which represents the largest conversion of not-for-profit hospitals for HCA, brings the company’s total count to 191 facilities. It includes: Allen County Hospital, Iola, Kan.; Baptist-Lutheran Medical Center, Kansas City, Mo.; Cass Medical Center, Harrisonville, Mo.; Independence Regional Health Center, Independence, Mo., Lafayette Regional Health Center, Lexington, Mo.; Lee’s Summit Hospital, Lee’s Summit, Mo.; Medical Center of Independence, Independence, Mo.; Menorah Medical Center, Overton Park, Kan.; Overland Park Regional Medical Center, Overland Park, Kan.; Research Belton Hospital, Belton, Mo.; Research Medical Center, Kansas City, Mo.; and Research Psychiatric Center, Kansas City, Mo.
HCA tapped Bryan Rogers, former CEO of the company’s Riverside, Calif. hospital, to run the newly created Health MidWest division. At $39.92 per share, its stock has lost $1.44 in trading today on higher than average volume.