BEVERLY HILLS, CA –August 6 –Tri-Isthmus Group, Inc. (TIGroup) (OTCBB:TISG) a provider of financial solutions to the healthcare services industry, announced today that the company has signed a Letter of Intent (LOI) to jointly acquire the fixed assets of the Liberty-Dayton Community Hospital in Southeastern Texas and to develop a new medical facility to serve the region. In a separate and related transaction, TIGroup has signed an LOI with the current owner of the hospital operations to take a majority controlling ownership position.
Through its subsidiary Southern Plains Medical Group, TIGroup together with Liberty County Hospital District Number One, intends to acquire the hospital based in Liberty from Frontier Healthcare Group.
In addition, the company’s LOI with the District addresses the following key elements:
Recapitalization of the hospital’s balance sheet and expansion of existing services to the community
LOI between TIGroup and Frontier Healthcare Group covering the acquisition of the hospital
An agreement to mutually develop a new facility to be majority owned by the District with the operations to be majority owned by TIGroup
The joint purchase of the fixed assets of the Liberty-Dayton Community Hospital by the District and TIGroup includes the land as well as the hospital building and equipment. The purchase calls for a $1.3 million investment from the District and a loan of $1.3 million to be arranged through TIGroup. TIGroup is expected to provide additional working capital as needed for hospital operations. TIGroup will own a minimum of 51% of the operations of the hospital and previous management may own up to 49% of the operations subject to certain conditions and limitations. The transaction is subject to customary due diligence, completion of definitive agreements, an audit, financing and any third party regulatory approvals.
TIGroup provides financial, operational and technological services to healthcare facilities primarily in non-urban markets. TIGroup unlocks the value of its investments by developing strong, long-term and mutually beneficial relationships with their physicians and the communities they serve. TIGroup primarily owns and operates community hospitals in Oklahoma. Through this relationship and transaction, TIGroup is expanding its services and investments into Texas.
District Board President Bruce Stratton said, “This is why we wanted TIGroup in our community. TIGroup management sees the vision and also recognizes the value of our citizens. They really understand our area’s healthcare needs and how each community is different. The future hospital is currently being designed with various options being considered. Updates will be provided to the community as planning progresses. Both David Hirschhorn and I want the towns of Liberty and Dayton to be fully engaged in the development process along with surrounding communities.”
TIGroup Chairman and CEO David Hirschhorn said, “I am inspired by the community leaders, physicians and hospital staff I have met. They are all committed to this project and to providing quality healthcare to this region. It was through Bruce’s leadership along with members of the Hospital District that made possible this transaction and the planning for the future development of a new facility. Once the acquisition closes, the current and future hospital will be operated by Southern Plains Medical Group (SMPG) located in Oklahoma City.
“SPMG is our company’s management affiliate of TIGroup. It benefits from seasoned healthcare professionals led by President Thomas Rice. He and his wife both graduated from high school in Beaumont, and married in Beaumont after graduation from Lamar University. Rice received his Master of Hospital Administration from Duke University. He worked in Houston from 1975 to 2000 in various healthcare leadership roles. He says he feels like he is returning home with this project and he intends for it to be a model hospital for the future. Other mid-size towns will be visiting our community and hospital to see what is possible with vision, community support, financing and physician involvement.
“To put this transaction in perspective, if successfully closed, as it relates to our existing critical access hospital operations, Liberty and its surrounding communities present a population demographic that is equivalent to about 80% of the combined communities that we currently serve in Oklahoma. This facility has the potential to be our largest operation to date. We have made significant investments in our operational infrastructure and management team as part of our strategic plan and are capable of handling 3-5x our current business volume without having to add any appreciable costs to our SPMG and TIGroup corporate overhead,” Hirschhorn said.
Located in the Southeastern region of Texas, the Liberty-Dayton area offers a relaxed quality of life in a small-town setting and has easy access to the major business and entertainment districts of Beaumont to the east and Houston to the west.
Additional information about the Liberty Dayton hospital may be found at: http://www.libertydaytonhospital.com/.
About Tri-Isthmus Group, Inc.
Tri-Isthmus Group, Inc. (TIGroup) is a financial solutions provider focused on healthcare services operations designed to deliver quality healthcare primarily outside of traditional urban hospital settings. The company is building a portfolio of interests in ambulatory surgical centers, rural hospitals, surgical hospitals and other centers operating in partnership with physicians. For more information, visit http://www.tig3.com.
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