Vanguard Health Systems, Nashville, said it is offering $225 million of new notes due in 2018 to finance its planned acquisition of six-hospital Detroit Medical Center.
Vanguard has agreed to pay $417 million at closing and invest $850 million in the system, valuing the deal for the not-for-profit DMC at $1.27 billion. Investor-owned Vanguard also has said it will take on a pension liability that it estimates will cost $184 million over seven years to fund. The agreement is being reviewed by Michigan Attorney General Mike Cox, and the deal also requires federal and state antitrust reviews.
Earlier this year, Vanguard sold $950 million in new notes due in either 2014 or 2015, and also entered into a new $815 million term loan and a $260 million revolving credit facility. Vanguard operates 15 hospitals in four states and, besides DMC, has pending deals to acquire three hospitals.
Another for-profit hospital chain, Capella Healthcare, Franklin, Tenn., said it sold $500 million in new notes due in 2017 and secured a $100 million revolving credit facility. The funds will be used to expand its existing 13 hospitals and make new acquisitions, according to a news release.
