Three-year-old Nashville hospital chain Vanguard Health Systems is eyeing the public markets for a possible initial public offering several months down the road, Modern Healthcare has learned.
Vanguard Chairman and Chief Executive Officer Charles Martin Jr. said the eight-hospital, privately held company has enough capital for its immediate needs from its equity partner, New York-based Morgan Stanley Capital Partners, but that it may look to the public markets to finance larger deals it is considering.
"Longer term, the hospital industry is very capital-intensive, and the appropriate place to access capital would be the markets," Martin said. "We have had conversations with some larger systems, and were we to do a multi-hospital acquisition, that would speed up our additional need for equity."
Vanguard is seeking multiple-hospital deals and is interested especially in opportunities in the Phoenix market, where it completed its purchase of PMH Health Resources in May. Vanguard, which now has four hospitals in that market, has been in talks with Catholic Healthcare West, which owns two hospitals in Phoenix, as well as with other Roman Catholic providers, Martin said.
Vanguard also announced two promotions within its upper management last week, which Martin characterized as part of the company's "evolution."
William "Larry" Hough, 49, has been promoted to president from executive vice president and chief operating officer. A co-founder of the company, Hough has been with Vanguard since its formation in 1997. Martin had been president. Both trace their healthcare roots to OrNda HealthCorp, where Martin was chairman, president and CEO, and Hough served as executive vice president and COO until Tenet Healthcare Corp. acquired the company in 1997.
Vanguard also named Keith Pitts vice chairman of the company's board of directors. Pitts, 43, previously had been a director on Vanguard's eight-member board and will retain his title as the company's executive vice president. Pitts, who served as chief financial officer at OrNda, joined Vanguard in July 1999, when he left his position as chairman and CEO of Mariner Post-Acute Network, a long-term care and assisted-living company that subsequently filed for bankruptcy protection in January 2000.