First of two parts
Ostensibly to stimulate cash flow and financially stabilize the main owner of Brotman Medical Center, Prospect Medical Holdings Inc. has struck a $205 million partnering deal with Leonard Green & Partners to go private.
The Los Angeles Business Journal, which reported the new arrangement this morning, said that the prospect of the onset of Obamacare probably was the triggering device.
Reporter Deborah Crowe quoted analysts as saying that “hospitals (such as Brotman) that treat large populations of patients insured by cheaper, managed care plans are expected to do well under national healthcare reform.”
A West Los Angeles leveraged buyout firm, Green & Partners is expected to emerge – when the deal is finalized next month — as the principal owner of Brotman, effectively, at about 51percent, one analyst told the newspaper this morning.
Green & Partners has a smart national profile because of its bevy of investments in retail chains such as Whole Foods, Rite-Aid and the Container Store. The Business Journal said Green has “some” experience in the healthcare field.
None of the principals was being revelatory, and most declined to say anything.
Brotman CEO Von Crockett told the newspaper this morning that other persons could be more illuminating because he was not involved in the deal that originally was made public last Monday.
“We just don’t have enough information yet because the deal is not done, and it could fall apart,” he said.
“Besides, Brotman is just a teeny piece of this. The bigger issue is Prospect, the parent company.”
Brotman is one of five hospitals owned by Propsect, started by Dr. Jacob Terner, the fourth largest shareholder, who could realize $8.5 million if he cashes his holdings. Dr. Terner no longer is active with Prospect.
Insiders are expected to exchange their “most of their shares” for a stake in the realigned company, according to the Journal, which cited CEO Samuel Lee, the largest single stockholder at 24 percent, and Dr. Jeereddi Prasad, at 2 percent the second largest.
(To be continued)
