Discussions over a private equity buyout of hospital operator HCA, which had reportedly included Bain Capital, Kohlberg Kravis Roberts and Merrill Lynch Private Equity, have fallen apart in the last few days, according to published reports.
The Wall Street Journal reported yesterday that Nashville-based HCA, which had put together a special committee to study an offer from an investor group including the three firms and the family of US senate majority leader Bill Frist, wanted 10 percent more for the price of the buyout. HCA’s $11 billion (€8.7 billion) debt reportedly prevented the investor group from raising the bid.
HCA was founded in the 1960’s by Senator Frist’s brother, Thomas Frist Jr., and his father, Thomas Frist Sr. The company had previously gone private in 1989 in a $5.1 billion leveraged buyout, at a time when the company was concerned about a hostile takeover. The company went back on the public market in 1992.
The company, which reported 2005 revenue of $24.5 billion, owns 182 hospitals and 94 surgery centers.
The buyout would likely have been one of the largest in history. HCA shares closed at $43.67 Wednesday on the New York Stock Exchange, valuing the company at nearly $18 billion.