Moody's Investors Service assigned ratings to the proposed $1 billion in bonds National Medical Enterprises was scheduled to issue last week in connection with its $3.3 billion acquisition of American Medical International. The New York-based firm downgraded ratings on NME's existing debt, but raised ratings on AMI's debt, most of which will be refinanced with bank debt. On NME's new debt, Moody's assigned a Ba2 rating on the senior unsecured notes and a Ba3 on the senior subordinated notes. In assigning the below-investment-grade ratings, Moody's noted NME's greater leverage and negative tangible net worth that will result from the AMI deal. NME's current notes were downgraded to Ba2 from Ba1. AMI's debt was raised to Ba1 from Ba2. After the acquisition, Santa Monica, Calif.-based NME will have a total of 70 hospitals in 13 states, making it the nation's second-largest investor-owned chain.
OrNda HealthCorp completed its acquisition of St. Luke's Health System, Phoenix, for $122 million. The system includes St. Luke's Medical Center, St. Luke's Behavioral Health Center and St. Luke's Skilled Nursing Facility, all in Phoenix, and Tempe (Ariz.) St. Luke's Hospital. It also includes Advantage Health, a Medicaid HMO. With the transaction, OrNda owns six hospitals in Arizona. The Nashville, Tenn.-based firm operates 48 hospitals in 15 states.
Integrated Health Services has purchased five alternate-site healthcare companies: The Rehab People and Therapy Resources, two therapy rehabilitation companies based in Langhorne, Pa., and Novato, Calif., respectively; Partners Home Health and Pro-Care, two home-care companies based in Nashville, Tenn., and Boca Raton, Fla., respectively; and Samaritan Care, a hospice-care provider based in Chicago. Financial terms of the acquisitions weren't released. Robert Elkins, M.D., Integrated's chairman and chief executive officer, said the company will continue to acquire ancillary companies that complement its current assortment of long-term- and subacute-care services. Owings Mills, Md.-based Integrated operates 192 facilities in 30 states with more than 25,000 beds.
West Tennesee Healthcare, Jackson, has become a shareholder in VHA, an Irving, Texas-based alliance of more than 1,100 not-for-profit hospitals. West Tennessee includes Jackson-Madison County General Hospital; Humboldt (Tenn.) General Hospital; Valley Regional Hospital, Camden; and Gibson General Hospital, Trenton. West Tennessee is the fourth VHA shareholder in the state.
Considering that more than 45,000 health bills were introduced in state legislatures in the last two years, the Englewood, Colo.-based Medical Group Management Association has created two field representative jobs. The representatives, who will work for the MGMA's state government relations office, will advocate MGMA positions and act as a conduit between the association and state organizations that represent group practices. The move is part of an effort by the MGMA, which represents 6,400 group practices and their administrators nationwide, to improve service to state organizations.
PhyCor has acquired Tidewater Primary Care Physicians, a Newport News, Va., clinic with 11 service sites. PhyCor plans to develop a "very large" multispecialty physician organization in the market, said Joseph C. Hutts, its president and chief executive officer. The Nashville, Tenn.-based medical group operator signed a long-term service agreement effective Jan. 1 with Tidewater's 32 family physicians. Terms weren't disclosed.
Value Health, Avon, Conn., has agreed to buy Health Management Strategies International, a mental health firm owned by Blue Cross and Blue Shield of the National Capital Area. Alexandria, Va.-based Health Management provides managed behavioral healthcare services to 8 million people. Value Health provides such services to more than 13 million people. Terms were not disclosed. The deal is expected to be completed later this month.