Becker's ASC Review

24 JOINT VENTURES Medical Facilities Corp., NueHealth Form Joint Venture, Acquire 7 ASCs From Meridian Surgical Partners — 6 Things to Know By Shayna Korol T oronto-based Medical Facilities Corp. formed a joint venture with Leawood, Kan.-based NueHealth and acquired seven ASCs from Meridian Surgical Part- ners, based in Brentwood, Tenn. Here are six things you should know: 1. e joint venture is called MFC Nueterra Holding Company and is majority owned by Medical Facilities Corp. 2. e new entity purchased seven ASCs from Meridian Surgical Partners for $46.5 million; Medical Facilities Corp. will pay their portion of the total purchase price through a draw on its credit facility and cash. 3. e joint venture acquired ownership interests in the following ASCs: • Brookside Surgery Center (Battle Creek, Mich.) • Central Arkansas Surgical Center (Rus- sellville, Ark.) • City Place Surgery Center (Creve Coeur, Mo.) • Eastwind Surgical (Westerville, Ohio) • Miracle Hills Surgery Center (Omaha, Neb.) • Riverview Ambulatory Surgical Center (Kingston, Pa.) • Two Rivers Surgery Center (Eugene, Ore.) For the 12 months ending Sept. 30, 2017, net revenue for the acquired centers hit $35.6 million and EBITDA margins were in the mid-20s. e centers are expected to be ac- cretive to the company's current operations. "ese initial seven surgical centers have established presence in their communities, skilled physicians and an attractive payer mix," said Robert Horrar, president and CEO of Medical Facilities Corp. "rough the joint venture, we have the ability to acquire additional ambulatory surgery centers and build synergies throughout the network." 4. Post-acquisition, MFC Nueterra will own 53 percent equity interest in the centers, with NueHealth providing day-to-day manage- ment and operations, such as accounting, materials management, payer contracting, benefits administration and billing and col- lections. 5. e combined centers sold have 26 operating and procedure rooms and provide orthopedic surgery, neurosurgery and pain management services. 6. Capital Advisors served as financial advi- sor to Meridian during the transaction. n SCA Partners with Providence Health & Services, Invests in Oregon-Based ASC: 5 Key Points By Laura Dyrda S urgical Care Affiliates, an Optum company, made an equity investment in a Portland, Ore.-based ASC in partnership with Renton, Wash.-based Providence Health & Services. Here are five things to know: 1. SCA made the equity investment in Oregon Outpatient Surgery Center, effective Dec. 1, 2017. Oregon Outpatient Surgery Center is the first ASC to join the partnership between SCA and Providence. 2. The partners hope to develop a statewide care delivery network focused on outpatient care; Oregon Outpatient Surgery Center is SCA's fourth ASC in the state. "This part- nership expands SCA's position in the Oregon market as a leading provider of high-quality, low-cost surgery," said SCA's Regional Vice President of Operations Bill Pethick. 3. Oregon Outpatient Surgery Center is a physician-led, multispecialty ASC with six physician partners. The center covers orthopedics, podiatry, ophthalmology and pain management. 4. The terms of the agreement were not disclosed. SCA partnered with two other surgery centers — Columbia, S.C.-based Midlands Orthopaedics Surgery Center and Brandon (Fla.) Ambulatory Surgery Center — in October 2017. 5. SCA now owns and operates more than 200 surgical facilities across the U.S., and partners with around 3,000 physicians. n

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