Universal Health Services, King of Prussia, Pa., said it expects the Federal Trade Commission to make its second request for information on Wednesday about the 68-hospital company's proposed $3.1 billion acquisition of Psychiatric Solutions, Franklin, Tenn., but UHS does not expect the FTC to oppose the deal overall. The company also reported strong results for its psychiatric business but much lower profit margins on its medical-surgical business.
UHS and Psychiatric Solutions have been separately providing the FTC with market-share data, in many cases showing that facilities that are near each other draw on different population bases, said Steve Filton, senior vice president and chief financial officer. This effort seems to have narrowed the FTC's focus on the deal considerably, he said. UHS does not believe that potential facility divestitures as part of winning the FTC's approval for the deal would have a significant impact on the profitability of the transaction, Filton said.
For the second quarter, UHS reported net income of $65.6 million, down about 19% from $80.9 million in the year-ago quarter. Revenue increased 2.7%, to $1.34 billion. The company's margin on medical-surgical facilities was hit by both fewer commercial managed care patients and more uninsured patients, Filton said.