By Lisa Kerner
Charlotte, N.C., March 19 - Community Health Systems, Inc. entered into a definitive merger agreement to acquire Triad Hospitals, Inc. for $54.00 per share in cash, or about $6.8 billion, including $1.7 billion of existing debt.
The merger will create the largest publicly traded hospital company in the United States, according to a company news release.
Both companies' boards of directors have approved the agreement, and the merger is expected to close in the third quarter of 2007.
The agreement includes a $130 million termination fee, according to an 8-K filing with the Securities and Exchange Commission.
Community Health Systems said it has financing commitments from Credit Suisse, Wachovia Capital Markets LLC and some of their affiliates.
"This deal will substantially increase Community Health Systems' overall scale and enhance its geographic diversity," chairman, president and chief executive officer Wayne T. Smith said in the release. "The two companies have similar values and we are excited about the 54 Triad hospitals and the addition of six new states to our portfolio. This acquisition complements our rural strategy by adding mid-size markets in great locations."
Triad terminated its previous merger agreement with a group led by affiliates of CCMP Capital Advisors and GS Capital Partners. The $6.4 billion proposed merger included a $20 million breakup fee.
Franklin, Tenn.-based Community Health Systems operates general acute care hospitals in non-urban communities.
Triad, based in Plano, Texas, owns and manages hospitals and ambulatory surgery centers.
| Acquirer: | Community Health Systems, Inc.
|
| Target: | Triad Hospitals, Inc.
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| Transaction value: | $6.8 billion
|
| Payment per share: | $54.00
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| Termination fee: | $130 million
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| Announcement date: | March 19
|
| Expected closing: | Third quarter of 2007
|
| Stock price for target: | NYSE: TRI; $49.36 on March 16
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