Lisa Ward at The Deal has some details on RegionalCare Hospital Partners' acquisition of Essent Healthcare announced this week. Citing private-equity industry sources, she says RegionalCare is paying $260 million for 12-year-old Essent's three facilities. That amounts to about 8 times the company's earnings before interest, taxes, depreciation and amortization.
The sponsors were hoping to auction off Essent, but the process was derailed when markets soured. Before resuming a process, the sponsors decided that Essent should divest two particular hospitals in Massachusetts. Because Massachusetts is the only U.S. state that mandates universal healthcare, these hospitals would only interest a select group of buyers.
One analyst who closely watches health care dealmaking, Les Funtleyder of Miller Tabak + Co. LLC, says the uncertainty is over and more deals are likely. "Health care is a growth industry," he says. "We've resolved any concerns about health care reform, the overhang from that; the risks are removed. A lot of it was delayed because people were worried. You don't want to invest in something that's going to be irrelevant. "HCA wouldn't have filed if we were still waiting on health care reform," he says.What's the hold up? Apparently the industry is still waiting to see how the few deals in the works, like Gentiva Health Services' purchase of Oddysey HealthCare, will play out. And — of course — for HCA to pull the trigger on its up to $4.6 billion offering. The Nashville hospital giant has yet to price or set a date for its IPO.
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