Triad Hospitals could receive approval "any day now" from the Internal Revenue Service for its pending $2.4 billion purchase of Quorum Health Group and is likely to complete the deal in April, Triad Chairman and Chief Executive Officer James Shelton said last week.
"We are coming down to the wire," Shelton told analysts during a conference call to discuss the company's fourth-quarter and year-end earnings.
If Triad wants to complete a major transaction within two years of its May 1999 spinoff from HCA-The Healthcare Co., it must get a green light from the IRS because of the tax-free nature of the separation from its former parent. Triad already has cleared another regulatory hurdle, having received no antitrust challenges from the federal government.
Dallas-based Triad first announced the acquisition of Quorum last October and said it hoped to complete the deal by the end of March. But the pending sales of some of Quorum's 21 owned hospitals and its entire management business are taking longer than Triad executives originally had anticipated, Triad spokeswoman Patricia Ball said.
Shelton said he was unable to disclose details about which Quorum hospitals Triad planned to divest as part of its acquisition of Brentwood, Tenn.-based Quorum because of confidentiality agreements.
In the past, he has indicated that the company wants to sell about six hospitals as well as Quorum's hospital management business, Quorum Health Resources. He also has left open the door to sell some Triad facilities, but he said last week that he had no plans to do so at the time of the Quorum acquisition.
Shelton said he has visited all of the Quorum hospitals Triad intends to keep and is excited about opportunities in Quorum's largest market, Fort Wayne, Ind., and at its hospital in Bentonville, Ark., which Quorum has promised to replace with a new facility.
Triad reported a net loss of $3.7 million, or 11 cents per share, for the quarter ended Dec. 31, 2000, compared with a loss of $52.1 million, or $1.68 per share, in the 1999 quarter. Those figures included "unusual items" such as $1 million in revenue and a charge of $7.1 million resulting from the closure of Triad's Mission Bay Hospital in San Diego. Revenue rose 6.7% to $320.1 million from $300.1 million.
For the year, Triad reported net income of $4.4 million, or 13 cents per share, compared with a net loss of $95.6 million, or $3.12 per share in the prior year. Revenue dropped 7.7% to $1.2 billion in 2000 from $1.3 billion in 1999.
Triad owns or leases 27 hospitals.