Health & Fitness
Health and Fitness
Health and Fitness
Thu, January 13, 2011
Wed, January 12, 2011
Tue, January 11, 2011
Northstar Healthcare Announces Acquisition of Palladium for Surgery - Dallas
TORONTO, ON and Houston, TX, Jan. 11 /CNW/ - Northstar Healthcare Inc. (TSX:NHC) today announced the board of directors has approved the acquisition of The Palladium for Surgery - Dallas Ltd. ("Palladium Dallas") from the Company's founder and Chief Executive Officer, Dr. Donald Kramer and Dr. James Vu. Dr. Kramer owns 95% of Palladium Dallas and Dr. Vu owns the remaining 5%. Northstar managed Palladium Dallas from May 2007 until December 31, 2009.
The acquisition enables Northstar to complete three important objectives:
- Align Dr. Kramer's interests with those of the company,
- Increase revenues and profitability,
- Have a foothold into the Dallas market which may allow Northstar to identify further growth opportunities.
On November 1, 2010, Palladium Dallas entered into a joint venture relationship with a group of six physician partners to provide surgical services in the Palladium Dallas facility. This venture, MicroSurgery Institute of Dallas ("MSI Dallas"), will be owned 25% by Northstar and 75% by the physicians. In November 2010, there were 131 surgical cases performed at MSI Dallas. In December 2010, there were 215 cases performed at MSI Dallas. This shows substantial growth from the average 65 cases per month performed at Palladium Dallas from January 2010 through October 2010, which was prior to the initiation of this new venture. Historically, Palladium Dallas has needed 57 cases to breakeven on a monthly basis. Northstar will manage MSI Dallas for its standard 5.5% of center collections.
The purchase price for Palladium Dallas, as determined by an independent valuation firm, was $2.2 million. Northstar will finance its purchase with a commercial bank loan. Dr. Kramer has indicated his willingness to personally guarantee the note.
Additionally, Northstar acquired Dr. Kramer's 18.2% interest in The Palladium for Surgery - Houston, Ltd. ("Palladium Houston") for an independently valued price of $0.2 million. This acquisition increases Northstar's ownership in Palladium Houston to 91%. Similar to terms and structure to Palladium Dallas, Palladium Houston has entered into a joint venture with eight physicians forming the MicroSurgery Institute of Houston. An active program has been put in place to attract additional physicians to both partnerships.
"The acquisition of Palladium Dallas fulfills one of our goals stated in the Q3 2010 MD&A," said Dr. Kramer. Dr. Kramer continued, "I believe the sale of my equity in Palladium Dallas and Palladium Houston further aligns my interests with those of the Company and its shareholders. Based on the strong performance of MSI Dallas during its first two months of operations, we believe this acquisition will be accretive to Northstar. We continue to evaluate acquisition candidates as we move into 2011."
About Northstar Healthcare Inc.
Northstar owns and manages ambulatory surgery centers in the United States, focusing initially on metropolitan areas in Texas. The Company holds interests in three ambulatory surgery centers, two in Houston and the third in Dallas.
Forward-looking statements
This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to business of Northstar Healthcare Inc. (the "Company") and the environment in which it operates. Forward-looking statements are identified by words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" and other similar expressions. These statements are based on the Company's expectations, estimates, forecasts and projections. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. These risks and uncertainties are discussed in the Company's regulatory filings available on the Company's web site at [ www.Northstar-Healthcare.com ] or at [ www.sedar.com ]. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances.
