November 11, 2015 - Foundation HealthCare, a for-profit surgical hospital company, will acquire a Houston hospital from University General Health System, which entered Chapter 11 bankruptcy in February.
Oklahoma City-based Foundation HealthCare owns and operates surgical centers and ambulatory surgical centers in six states, including Texas. The publicly traded company will acquire University General Hospital (UGH) Houston for $33 million in a court-approved sale, the company announced.
The deal adds to Foundation HealthCare's Houston-area assets. "The Foundation team has a great track record in this market, having developed, built and managed seven ambulatory surgery centers and one surgical hospital in the Houston area," the company's CEO Stanton Nelson said in a news release. New acquisitions are part of the company's growth strategy, according Securities and Exchange Commission filings.
University General Health System entered bankruptcy in February in an effort to protect the 69-bed Houston hospital from the fate of the failing company's Dallas hospital, which closed last year. The system made a string of acquisitions but never achieved its projected volume or revenue. Police at one point arrived at the Houston hospital in an effort to take equipment on behalf of the system's creditors.
The Houston hospital had net revenue of more than $70 million last year, according to court records. Foundation HealthCare ended last year with an operating income of $2 million on revenue of $101.8 million, its financial statements showed. The company reported a net loss attributable to Foundation HealthCare of $1.3 million.
"We are excited about the prospects of UGH becoming part of Foundation's hospital network," Dr. Hassan Chahadeh, chairman and CEO of University General Health System, said in a news release. "Foundation shares our vision of physician-owned hospitals and provides a strong platform for UGH to continue providing high-quality and cost-effective healthcare services in a personalized manner favored by physicians, patients and employees."
By Melanie Evans
Posted on ModernHealthcare.com
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