Medical Facilities completes sale of interest in OSH

Executive Summary

• Medical Facilities Corp. completed the sale of its 63.95555% interest in Oklahoma Spine Hospital LLP (OSH) to SSM Health Care and OSH physician partners for a total purchase price of $46.0 million.
• The corporation also completed the sale of its ambulatory surgery center, The Surgery Center of Newport Coast LLC, to Newport Center GK LLC for $1.5 million on December 31, 2025.
• The company is evaluating the use of net proceeds from these transactions, including potential share repurchases or distributions to shareholders.

Key Details

• Oklahoma Spine Hospital (OSH) Sale:
  • Seller: Medical Facilities (USA) Holdings Inc. (MFH), a wholly owned subsidiary of Medical Facilities Corp.
  • Buyers: SSM Health Care of Oklahoma Inc. (acquired 55.50032% interest) and an entity owned by OSH's physician partners (acquired 8.45523% interest).
  • Total Purchase Price: $46.0 million, subject to customary purchase price adjustments.
  • Financial Performance of OSH (Fiscal Year ended Dec. 31, 2024, excluding government stimulus income):
    • Facility Service Revenue: $76.4 million (representing 23.0% of MFC's consolidated facility service revenue).
    • Income from Operations: $6.7 million (representing 13.6% of MFC's consolidated income from operations).
• Newport Coast Surgery Center Sale:
  • Asset: The Surgery Center of Newport Coast LLC (doing business as Newport Center Surgical), located in Newport Beach, Calif.
  • Buyer: Newport Center GK LLC.
  • Sale Price: $1.5 million.
  • Completion Date: December 31, 2025.
• Use of Proceeds:
  • The corporation is evaluating alternatives for the anticipated net proceeds, including:
    • Repurchasing shares under the corporation's normal course issuer bid.
    • Making a substantial issuer bid.
    • Making distributions to shareholders.

Notable Quotes

• Jason Redman, President and CEO: "We sincerely thank our partners at SSM and the OSH physicians for their collaboration on this transaction... We are pleased to have worked alongside such a talented group to achieve our shared goals and remain confident that OSH is well positioned for future success under SSM's leadership."
• Adina Storch, Chair of the Board: "This transaction aligns with MFC's strategic direction, allowing us to maximize the return of capital to our shareholders and to focus on our core assets. This divestiture enables us to continue delivering high-quality health care services in our key markets while creating value for our shareholders."