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8-K - FORM 8-K - VANGUARD HEALTH SYSTEMS INC | g24065e8vk.htm |
EX-4.2 - EX-4.2 - VANGUARD HEALTH SYSTEMS INC | g24065exv4w2.htm |
EX-4.3 - EX-4.3 - VANGUARD HEALTH SYSTEMS INC | g24065exv4w3.htm |
EXHIBIT 99.1
Vanguard Announces Closing of $225.0 Million Senior Notes Offering
NASHVILLE, Tennessee, July 14, 2010 Vanguard Health Systems, Inc. (Vanguard) announced
the closing today of the private placement offering of $225.0 million aggregate principal amount of
8% Senior Notes due 2018 (the New Notes) co-issued by Vanguards subsidiaries, Vanguard Health
Holding Company II, LLC (VHS Holdco II) and Vanguard Holding Company II, Inc. (VHS Holdco II
Inc. and, together with VHS Holdco II, the Issuers). The Issuers obligations under the New
Notes will be fully and unconditionally guaranteed on a senior unsecured basis by Vanguard,
Vanguard Health Holding Company I, LLC (VHS Holdco I), and certain restricted subsidiaries of VHS
Holdco II. On January 29, 2010, the Issuers issued $950.0 million aggregate principal amount of 8%
Senior Notes due 2018 (the Existing Notes) pursuant to an indenture dated as of January 29, 2010
among the Issuers, the guarantors party thereto and the trustee (the Indenture). The New Notes
were issued at an offering price of 96.250% plus accrued interest from January 29, 2010. The
Existing Notes were issued at an offering price of 98.555% plus accrued interest, if any, from
January 29, 2010. The New Notes are being issued as additional notes under the Indenture. The New
Notes are expected to be treated as a single series with the Existing Notes, except that (i) the
New Notes will be subject to a separate registration rights agreement and (ii) unless and until the
New Notes are registered, the New Notes will have a different CUSIP number from that of the
Existing Notes and will not be fungible with the Existing Notes.
The Issuers intend to use the net proceeds of the offering of the New Notes, together with cash on
hand, to finance Vanguards acquisition of substantially all of the assets of The Detroit Medical
Center, a Michigan non-profit corporation, consisting primarily of eight acute care and specialty
hospitals in the Detroit, Michigan metropolitan area and related healthcare facilities and to pay
fees and expenses in connection with the foregoing. If the acquisition is not consummated, the
proceeds of the offering of the New Notes will be used for general corporate purposes, including
other acquisitions.
This announcement does not constitute an offer to sell or the solicitation of an offer to buy the
New Notes. The New Notes were offered in a private placement to qualified institutional buyers
pursuant to Rule 144A and outside the United States in compliance with Regulation S under the
Securities Act of 1933, as amended (the Securities Act).
The New Notes have not been registered under the Securities Act, and may not be offered or sold in
the United States absent registration or an applicable exemption from registration requirements.
Company Information and Forward-Looking Statements
About Vanguard
Vanguard owns and operates 15 acute care hospitals with 4,135 licensed beds and complementary
facilities and services in Chicago, Illinois; Phoenix, Arizona; San Antonio, Texas; and
Massachusetts. Vanguards strategy is to develop locally branded, comprehensive healthcare delivery
networks in urban markets. Vanguard will pursue acquisitions where there are opportunities to
partner with leading delivery systems in new urban markets or to increase its presence in existing
markets. Upon acquiring a facility or network of facilities, Vanguard implements strategic and
operational improvement initiatives including expanding services, strengthening relationships with
physicians and managed care organizations, recruiting new physicians and upgrading information
systems and other capital equipment. These strategies improve quality and network coverage in a
cost effective and accessible manner for the communities Vanguard serves.
This press release contains forward-looking statements within the meaning of the federal
securities laws which are intended to be covered by the safe harbors created thereby.
Forward-looking statements are those statements that are based upon managements current plans and
expectations as opposed to historical and current facts and are often identified in this report by use of words including but not
limited to
may, believe, will, project, expect,
estimate, anticipate, and plan. These statements are based upon estimates and assumptions
made by Vanguards management that, although believed to be reasonable, are subject to numerous
factors, risks and uncertainties that could cause actual outcomes and results to be materially
different from those projected. These factors, risks and uncertainties include, among others,
Vanguards high degree of leverage and interest rate risk; Vanguards ability to incur
substantially more debt; operating and financial restrictions in Vanguards debt agreements; the
enactment in March 2010 of major healthcare reform legislation and the future possible enactment of
additional federal or state health care reform and changes in federal, state or local laws or
regulations affecting the healthcare industry; Vanguards ability to generate cash necessary to
service Vanguards debt; weakened economic conditions and volatile capital markets; post-payment
claim reviews by governmental agencies could result in additional costs to us; Vanguards ability
to successfully implement Vanguards business strategies; Vanguards ability to grow its business
and successfully integrate future acquisitions, including the assets of The Detroit Medical Center;
potential acquisitions, including the assets of The Detroit Medical Center, could be costly,
unsuccessful or subject Vanguard to material unexpected liabilities; conflicts of interest that may
arise as a result of Vanguards control by a small number of stockholders; the highly competitive
nature of the healthcare industry; governmental regulation of the industry, including Medicare and
Medicaid reimbursement levels; pressures to contain costs by managed care organizations and other
insurers and Vanguards ability to negotiate acceptable terms with these third party payers;
Vanguards ability to attract and retain qualified management and healthcare professionals,
including physicians and nurses; future governmental investigations; the availability of capital to
fund Vanguards corporate growth strategy; potential lawsuits or other claims asserted against
Vanguard; Vanguards ability to maintain or increase patient membership and control costs of its
managed healthcare plans; Vanguards exposure to the increased amounts of and collection risks
associated with uninsured accounts and the co-pay and deductible portions of insured accounts;
dependence on Vanguards senior management team and local management personnel; volatility of
professional and general liability insurance for Vanguard and the physicians who practice at its
hospitals and increases in the quantity and severity of professional liability claims; Vanguards
ability to maintain and increase patient volumes and control the costs of providing services,
including salaries and benefits, supplies and bad debts; increased costs from further regulation of
healthcare and potential liability from Vanguards failure to comply, or allegations of Vanguards
failure to comply, with applicable laws and regulations; the geographic concentration of Vanguards
operations; Vanguards failure to adequately enhance Vanguards facilities with technologically
advanced equipment; technological and pharmaceutical improvements that increase the cost of
providing, or reduce the demand for, healthcare services and shift demand for inpatient services to
outpatient settings; costs and compliance risks associated with Section 404 of the Sarbanes-Oxley
Act; a failure of Vanguards information systems that would adversely impact its ability to manage
its operations; material non-cash charges to earnings from impairment of goodwill associated with
declines in the fair market values of Vanguards reporting units; and volatility of materials and
labor costs for potential construction projects that may be necessary for future growth.
Although Vanguard believes that the assumptions underlying the forward-looking statements contained
in this press release are reasonable, any of these assumptions could prove to be inaccurate, and,
therefore, there can be no assurance that the forward-looking statements included in this press
release will prove to be accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, you should not regard the inclusion of such information
as a representation by Vanguard that its objectives and plans anticipated by the forward-looking
statements will occur or be achieved, or if any of them do, what impact they will have on
Vanguards results of operations and financial condition. Vanguard undertakes no obligation to
publicly release any revisions to any forward-looking statements contained herein to reflect events
and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated
events.
Contact:
Vanguard Health Systems, Inc.
Gary Willis, Senior Vice President and Chief Accounting Officer
(615) 665-6098
Vanguard Health Systems, Inc.
Gary Willis, Senior Vice President and Chief Accounting Officer
(615) 665-6098
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