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Healthcare

SOLIC professionals have been among the most active healthcare financial advisors, advising on the recapitalization or sale of over $5.0 billion of healthcare assets. SOLIC professionals have experience across the full healthcare industry continuum:

  • Acute Care Hospitals and Surgery Centers
  • Physician Services
  • Post-Acute Care
  • Ambulatory Care

MedCath Corporation

MedCath test tombstone

MedCath Corporation is a publicly-traded, national healthcare provider focusing on high-acuity services and specializing in the diagnosis and treatment of cardiovascular disease. SOLIC professionals served as performance improvement restructuring advisors, and exclusive financial advisors to evaluate and execute strategic alternatives. Specific services included: setting valuation parameters; development and execution of a disposition plan; development and implementation of appropriate communication strategies; identification of potential buyers; and, assistance in structuring and negotiating transactions. After assisting in the proper positioning of the portfolio holdings, SOLIC professionals were responsible for the structuring, negotiation and highly successful execution of a series of 14 transactions realizing a doubling of market value over the course of 18 months, with shareholder value appreciating from $7/share trading price to an anticipated distribution of realized proceeds in excess of $14/share.

MedCath test tombstone

ALLEGIANCE HEALTH

Investment Banking, Mergers & Acquisition

Company Description:

  • Allegiance Health (“Allegiance”) is a 480-bed community-owned health system in Jackson, Michigan with a 270-physician clinically integrated network and over 40 ambulatory locations.

Challenges Faced:

  • Despite being a sole community provider and having received the Malcom Baldrige Award for Quality, Allegiance had experienced declining market share due to increased competition from statewide health systems and outmigration of both patients and medical staff to neighboring cities such as Ann Arbor and Lansing. In addition, declining reimbursement rates from both commercial and government payors had resulted in a significant decline in profitability. To maintain its existing infrastructure and breadth of quality services, Allegiance determined it needed to partner with a large regional or national system health system.

Solutions Provided by SOLIC Professionals:

  • Served as the exclusive financial advisor to the Board of Trustees to identify and prioritize strategic needs and objectives, and to develop and qualify a list of strategic partners to optimize achievement of these strategic goals.
  • Managed the strategic alternative execution process, orchestrating a confidential solicitation process, providing valuation and due diligence support, and advising the Allegiance Board on structuring and negotiating the terms of the ultimate transaction.

Result Highlights:

  • Allegiance affiliated with Henry Ford Health System (HFHS), a five-hospital system headquartered in Detroit, Michigan and recognized as one of the nation’s leading integrated health systems.
  • As part of the affiliation, Allegiance joined HFHS’ obligor group, receiving a credit rating upgrade, and a capital commitment to finance a new flagship hospital.
  • Allegiance also received access and staffing from HFHS network of specialists, one of the largest academic medical groups in the U.S.

ROCKFORD HEALTH SYSTEM

Investment Banking

Company Description:

  • Located in Rockford, Illinois, Rockford Health System (“RHS”) is the largest and most comprehensive health system serving northwestern Illinois and southern Wisconsin, providing nearly one million patient encounters a year through Rockford Memorial Hospital, Rockford Health Physicians, the Visiting Nurses Association, and Van Matre HealthSouth Rehabilitation Hospital.

Challenges Faced:

  • As an Independent health system, RHS faced growing competition from large region health systems in Chicago and Wisconsin. This was resulting in outmigration and declining market share. In addition, RHS had an aging facility that required significant capital investment to remain competitive. As a result, RHS’ Board was seeking to partner with a larger regional or national health system that would support its long-term mission.

Solutions Provided by SOLIC Professionals:

  • Served as the exclusive financial advisor to RHS in exploring a full range of strategic partnership opportunities.
  • Led the transaction process, which entailed dialogue with prospective strategic partners, developing and implementing a competitive solicitation process, providing valuation and due diligence support, structuring and negotiating the terms of the System Formation Agreement, and performing a credit market assessment of the combined entity.

Result Highlights:

  • As a result of negotiations led by SOLIC professionals with several highly interested leading health systems, Mercy Health System, a not-for-profit, vertically integrated, multi-specialty health system executed the definitive agreements with RHS.
  • The newly-created multi-regional integrated health system consists of five hospitals, more than 550 physicians, and 80 outpatient clinics and other service sites that provide care to residents in more than 40 communities throughout northern Illinois and southern Wisconsin.

WINCHESTER HOSPITAL

Investment Banking

Company Description:

  • Winchester Hospital (“Winchester”) is a provider of comprehensive health care services in northwest suburban Boston, with a 229-bed facility and staff of 2,700.

Challenges Faced:

  • Winchester’s Board of Directors needed to identify a long-term, strategic partner that would provide the best opportunity to create an exceptional healthcare system.

Solutions Provided by SOLIC Professionals:

  • Acted as financial advisor
  • Reviewed Winchester’s current financial position and operating trends, evaluated strategic transaction proposals and potential strategic partners, and assisted in selecting, structuring, negotiating, and closing the affiliation agreement.

Result Highlights:

  • Closed an affiliation and capital support agreement with Lahey Health, a nationally-recognized healthcare network with locations throughout northeastern Massachusetts and southern New Hampshire.
  • After a thorough strategic alternative review, and associated competitive solicitation process, Lahey Health was selected as the preferred long-term strategic partner based on criteria including their clear commitment to providing high-quality care locally, access to capital, and ability to support the infrastructure upgrades necessary to transition to value-based reimbursement.

MedCath Corporation

MedCath test tombstone

MedCath Corporation is a publicly-traded, national healthcare provider focusing on high-acuity services and specializing in the diagnosis and treatment of cardiovascular disease. SOLIC professionals served as performance improvement restructuring advisors, and exclusive financial advisors to evaluate and execute strategic alternatives. Specific services included: setting valuation parameters; development and execution of a disposition plan; development and implementation of appropriate communication strategies; identification of potential buyers; and, assistance in structuring and negotiating transactions. After assisting in the proper positioning of the portfolio holdings, SOLIC professionals were responsible for the structuring, negotiation and highly successful execution of a series of 14 transactions realizing a doubling of market value over the course of 18 months, with shareholder value appreciating from $7/share trading price to an anticipated distribution of realized proceeds in excess of $14/share.

MedCath test tombstone

MESA MEDICAL GROUP

Investment Banking

Company Description:

  • MESA Medical Group (“MESA” or “the Company”) had established itself as the largest provider of Emergency Department services in Kentucky with over 20 hospital contracts and 400 physicians. As part of its growth strategy, MESA had expanded its service offerings to include Hospitalist Medicine and its geographic footprint to include Ohio, Indiana and West Virginia. As a result of its services commitment, MESA has forged long-tenured relationships with leading regional not-for-profit health systems, as well as publicly-traded hospital management companies.

Challenges Faced:

  • The Company had grown rapidly with the support of its private equity partners and was seeking a sale or recapitalization to provide liquidity to its institutional holders.

Solutions Provided by SOLIC Professionals:

  • Engaged as financial advisor to evaluate potential strategic alternatives, identify prospective acquirers, develop and implement a competitive solicitation process, provide valuation support, and structure and negotiate the terms of the sale transaction, as well as all related physician agreements.

Result Highlights:

  • After discussions with several leading physician staffing operators, MESA agreed to be acquired by Team Health Holdings (NYSE:TMH), one of the largest providers of outsourced physician staffing solutions for hospitals in the U.S.

EAGLE HOSPITAL PHYSICIANS, LLC

Restructuring, Investment Banking

Company Description:

  • Eagle Hospital Physicians, LLC (“Eagle” or the “Company”), was a leading hospitalist management company focused on developing and managing hospitalist practices for its hospital partners. The Company provided inpatient management solutions through three sources consisting of on-site hospitalist medical practices, telemedicine, and temporary hospitalist staffing through a locum tenens division. Eagle had a national presence and long-standing customer relationships with over 430 affiliated clinicians, client contracts in 17 states at 33 leading regional hospitals and over 550,000 hospital medicine annual encounters.

Challenges Faced:

  • The Company embarked on a roll-up strategy directed by its private equity owner that did not prove successful primarily due to timing, management turnover, and integration issues.
  • Compounding the situation, the owner operators who drove physician relationships (and the top senior executives of each of the three main practices acquired by the private equity group) departed shortly after the combination.
  • Additionally, the combined organizations undertook minimal post-acquisition integration with respect to clinical leadership support models, physician culture, standardized contracting and financial systems.

Solutions Provided by SOLIC Professionals:

  • Retained as financial and restructuring advisor, serving as Executive Chairman, COO and CFO to affect a realignment of organizational strategy including refocusing on client relationships to stabilize and modify contracts to grow contribution margin, implementing critical improvements in revenue cycle management and standardizing recruiting and compliance programs.
  • Developed and implemented comprehensive operational and capital structuring rehabilitation plans to integrate, right size, stabilize, and recapitalize the Company which successfully culminated in the consummation of a debt for equity capital restructuring that resulted in the senior lenders owning a majority of the Company. This resulted in mitigating legacy liabilities and positioning the Company for future growth under new leadership.
  • Subsequent to completing the operational restructuring initiatives, SOLIC was retained to pursue a sale or recapitalization of the Company.

Result Highlights:

  • Successfully repositioned Company for profitable growth by restructuring and standardizing all client contracts, eliminating a layer of middle management to create greater client accountability, renegotiating key payor contracts and enhanced physician recruiting.
  • Recruited new leadership to accelerate growth of telemedicine division.
  • After SOLIC orchestrated a successful competitive solicitation process, Eagle’s Hospitalist Division was acquired by Sound Hospital Physicians, one of the largest providers of hospitalist care.

THE ATLANTA CARDIOLOGY GROUP, P.C.

Investment Banking

Company Description:

  • The Atlanta Cardiology Group, P.C. was a leading cardiology group practice in metropolitan Atlanta and one of the largest cardiology groups in the Southeast.

Challenges Faced:

  • As a result of increased employment of primary care physicians by health systems and reimbursement changes from leading commercial payors, Atlanta Cardiology was facing enhanced competition and growing challenges to its traditional referral networks as well as declining reimbursement. Atlanta Cardiology determined that its competitiveness could be significantly enhanced by affiliation with a regional health system.

Solutions Provided by SOLIC Professionals:

  • Served as financial advisor and orchestrated a competitive solicitation between the leading health systems in the metropolitan Atlanta area.

Result Highlights:

  • Valued, structured and negotiated the final terms of the sale transaction, realizing significant value for the stakeholders and optimal positioning within the successor organization for ongoing success.

MedCath Corporation

MedCath test tombstone

MedCath Corporation is a publicly-traded, national healthcare provider focusing on high-acuity services and specializing in the diagnosis and treatment of cardiovascular disease. SOLIC professionals served as performance improvement restructuring advisors, and exclusive financial advisors to evaluate and execute strategic alternatives. Specific services included: setting valuation parameters; development and execution of a disposition plan; development and implementation of appropriate communication strategies; identification of potential buyers; and, assistance in structuring and negotiating transactions. After assisting in the proper positioning of the portfolio holdings, SOLIC professionals were responsible for the structuring, negotiation and highly successful execution of a series of 14 transactions realizing a doubling of market value over the course of 18 months, with shareholder value appreciating from $7/share trading price to an anticipated distribution of realized proceeds in excess of $14/share.

MedCath test tombstone

SSM OF WISCONSIN

Investment Banking

Company Description:

  • With headquarters in Madison, Wisconsin, SSM of Wisconsin (“SSM”), is a comprehensive not-for-profit Catholic healthcare system that is owned and operated by SSM Health Care based in St. Louis, Missouri, one of the largest Catholic systems in the country. Upland Hills Health, located in Dodgeville, Wisconsin, was recently rated one of the Top 100 critical access hospitals in the country. SSM and Upland Hills operated St. Mary’s Dialysis Center in Madison, Wisconsin, the St. Clare Dialysis Center in Baraboo, Wisconsin, and the Upland Hills Health Dialysis Center in Dodgeville, Wisconsin. The dialysis clinics provided over 41,000 treatments annually with essential services to patients suffering from chronic kidney disease and end stage renal disease.

Challenges Faced:

  • Despite the demand for the dialysis programs, SSM and Upland Hills did not have the critical mass with either payors or pharmaceutical companies to make these clinics profitable, resulting in financial challenges for the parent health system. As a result, SSM made a strategic decision to divest the dialysis clinics.

Solutions Provided by SOLIC Professionals:

  • Served as the exclusive financial advisor in exploring a full range of strategic transaction opportunities available to the dialysis centers.
  • In advising SSM, the SOLIC team led the transaction process, which entailed dialogue with prospective strategic partners, developing and implementing a competitive solicitation process, providing valuation and due diligence support, and structuring and negotiating the terms of the agreement with Fresenius.

Result Highlights:

  • SOLIC professionals led negotiations with several leading dialysis providers. As a result, Fresenius, the largest provider of services to patients with kidney disease with a network of more than 2,150 dialysis facilities, entered into agreements to acquire and operate the dialysis centers as well as provide inpatient acute dialysis services at St. Mary’s Hospital in Madison, Wisconsin.

SIOUXLAND SURGERY CENTER

Investment Banking

Company Description:

  • Located in Dakota Dunes, South Dakota, the Siouxland Surgery Center (“SSC”) is a market-leading specialty hospital with 40 licensed beds and 14 operating rooms serving communities throughout Northwest Iowa, Southeast South Dakota, and Northeast Nebraska.

Challenges Faced:

  • SSC was seeking a partner that could expand its market position, increase range of service offerings, expand access to managed care networks and population health capabilities, create greater operating efficiencies through clinical integration, shared services, supply chain management and labor utilization, and ensure SSC has the requisite financial resources and access to capital to achieve its vision and mission to better position SSC for future growth.

Solutions Provided by SOLIC Professionals:

  • Served as the exclusive financial advisor to PhyCare Management Services, LLC (“PhyCare”), which is SSC’s physician-led and governed management services company, in exploring a full range of strategic partnership opportunities available to the Hospital.
  • Led the transaction process, which entailed dialogue with prospective strategic partners, developing and implementing a competitive solicitation process, providing valuation support and structuring and negotiating the terms of the joint venture with Mercy Medical Center and United Surgical Partners International (“USPI”).
  • Orchestrated an accelerated due diligence process, documented all transactional disclosure schedules and supported the organizations’ strategic planning process.

Result Highlights:

  • As a result of negotiations led by SOLIC professionals with several highly interested leading health systems, Mercy Medical Center Sioux City, a non-profit hospital and USPI, an owner of more than 215 surgical facilities, partnered to acquire a majority interest in SSC. Collectively, USPI and Mercy now own more than 51% of SSC. The new investment is designed to meet the needs of a growing community and will lead to more than $100 million in improvements to nearby facilities. Capital improvements will include a streamlined information technology system, a chronic disease registry and support for community health programs.

TENDER LOVING HEALTH CARE SERVICES, INC.

Restructuring, Investment Banking

Company Description:

  • Tender Loving Health Care Services, Inc. (“TLC”) was the largest privately held independent provider of home nursing and hospice services in the U.S. with 92 home health and 11 hospice agencies located in 22 states and the District of Columbia.

Challenges Faced:

  • Two months after TLC refinanced its existing credit facilities in connection with the acquisition of AccuMed and NorthWestern Memorial Home Health Care, TLC experienced (i) poor post acquisition integration, (ii) significant decline in revenues and breach of loan covenants, (iii) lack of urgency and accountability at all levels of management, (iv) bloated field care-giver cost structure, and (v) multiple underperforming and negative contribution margin branches.

Solutions Provided by SOLIC Professionals:

  • A SOLIC professional was appointed Executive Chairman in order to oversight the capital and operational restructuring.
  • Engaged as exclusive financial advisor to develop and implement value maximization strategies including a sale of the Company or its assets.
  • SOLIC professionals developed and implemented a performance improvement improving EBITDA by over $15 million annually and then orchestrated the sale of the company at significant premium to market multiples.

Result Highlights:

  • By leveraging the potential of a competitive auction process, SOLIC professionals were able to induce a premium pre-emptive bid from Amedisys (NASDAQ:AMED) for a cash price of $395 million. The transaction represented a premium valuation multiple in excess of 11.0x EBITDA.

MedCath Corporation

MedCath test tombstone

MedCath Corporation is a publicly-traded, national healthcare provider focusing on high-acuity services and specializing in the diagnosis and treatment of cardiovascular disease. SOLIC professionals served as performance improvement restructuring advisors, and exclusive financial advisors to evaluate and execute strategic alternatives. Specific services included: setting valuation parameters; development and execution of a disposition plan; development and implementation of appropriate communication strategies; identification of potential buyers; and, assistance in structuring and negotiating transactions. After assisting in the proper positioning of the portfolio holdings, SOLIC professionals were responsible for the structuring, negotiation and highly successful execution of a series of 14 transactions realizing a doubling of market value over the course of 18 months, with shareholder value appreciating from $7/share trading price to an anticipated distribution of realized proceeds in excess of $14/share.

MedCath test tombstone

PROGRESSIVE ACUTE CARE, LLC

Restructuring, Investment Banking

Company Description:

  • Progressive Acute Care, LLC (“PAC” or the “Company”) was a Louisiana-based for-profit healthcare system that operated four community-based hospitals with a total of 250 beds.

Challenges Faced:

  • Issues facing the provider included: declining market share, deteriorating payor mix, and challenges recruiting physicians, all of which resulted in weakening financial results, lack of liquidity and vendor management challenges, and technical default on long-term debt.

Solutions Provided by SOLIC Professionals:

  • Retained by the Board of Directors to provide a full complement of investment banking and restructuring support services.
  • Orchestrated a competitive sale process, soliciting full range of non-profit and for-profit hospital operators and institutional investors.
  • Assisted with liquidity planning and management including development of rolling 13 week cash forecast and vendor prioritization.
  • Managed the preparation of financial analyses, including weekly updates to cash collateral/DIP budgets.
  • Assisted PAC in preparation and filing of bankruptcy under Chapter 11 of the U.S. Bankruptcy Code.
  • Structured and negotiated sale of all four hospitals.

Result Highlights:

  • Successfully negotiated sale of Dauterive Hospital to Iberia Medical Center.
  • Completed the sale of remaining Avoyelles Hospital, Winn Parish Medical Center and Oakdale Community Hospital to Allegiance Health.

COMMUNITY MEMORIAL HEALTHCENTER

Investment Banking

Company Description:

  • Community Memorial Healthcenter (“CMH”) owns and operates an acute care hospital and long-term care facility providing comprehensive medical, surgical and long-term care services for the residents of Southern Virginia and Northern North Carolina.

Challenges Faced:

  • CMH had a 50-year old, obsolete hospital facility and was experiencing challenges recruiting physicians and retaining patients. The problem was compounded by the fact that several neighboring communities had recently built new hospitals with investment from for-profit operators. The Company’s strategic alliance with VCU Health System had not resulted in any capital to construct a new facility.

Solutions Provided by SOLIC Professionals:

  • Served as financial advisor to CMH’s Board of Directors.
  • Reviewed CMH’s financial position and operating trends, evaluated capital strategic alternatives for the hospitals.
  • Managed a competitive solicitation process that included regional health systems, national for-profit operators and faith based systems.
  • Assisted Board of Directors in selecting, structuring, negotiating, and closing a strategic transaction.

Result Highlights:

  • Planned and executed a successful solicitation process that culminated with an affiliation and integration with Virginia Commonwealth University, a major, urban public research university with 13 schools and one college

Coshocton County Memorial Hospital

Restructuring

Company Description:

  • Based in Coshocton, Ohio, Coshocton County Memorial Hospital (“CCMH” or the “Hospital”) operates as a general acute care hospital with twelve primary care and specialty physician clinics across central Ohio. The Hospital is organized as a private 501(c)3 non-profit corporation and is a Medicare-designated Sole Community Hospital.

Challenges Faced:

  • As a result of its tight liquidity position, existing financing obligations, and competitive pressures negatively impacting its patient revenue, the CCMH filed a petition for protection under Chapter 11 of the U.S. Bankruptcy Code.

Solutions Provided by SOLIC Professionals:

  • Served as the interim Chief Restructuring Officer and Chief Financial Officer and provided support staff to support a full range of restructuring initiatives at the Hospital.
  • In role as interim CRO/CFO, managed and oversaw the Hospital’s financial operations, vendor relations, liquidity controls and developed a rolling 13-week cash forecast related to debtor-in-possession financing.
  • Supported the Hospital’s management in the oversight, implementation and execution of certain operational improvement initiatives prior to and during the bankruptcy filing.
  • Initiated and led a broad solicitation process contacting various asset-based lenders, healthcare finance companies and specialty lenders to provide the Hospital rescue financing in support of its tight liquidity and funding operational improvement initiatives.

Result Highlights:

  • The SOLIC led process resulted in a structured solution in which the Hospital entered into a debtor-in-possession financing agreement and eventual change-of-control asset sale agreement with Prime Healthcare Foundation (“Prime”), a not-for-profit organization affiliated with Prime Healthcare, a national hospital management company based in California with 43 acute-care hospitals in 14 states. Under its asset purchase agreement, Prime acquired substantially all of CCMH’s assets, has committed to keep the hospital operating as an acute-care facility, maintain all current service lines at the Hospital, and retain substantially all of CCMH’s employees. The transaction, valued at $36.0 million, allowed CCMH to operate as a well-capitalized hospital with a proven healthcare system providing it with access to industry-leading systems as well as significant capital for facilities improvements, technology and equipment.

Representative experience includes transactions led by SOLIC professionals at predecessor firms