MedCath to sell Texsan Heart Hospital

Nov 8 2010

MedCath Corporation (Nasdaq: MDTH) announced today it has entered into a definitive agreement to sell substantially all the assets of Texsan Heart Hospital, owned by MedCath and its physician investors, to Methodist Healthcare System of San Antonio. The transaction is expected to close during MedCath's second fiscal quarter of 2011, which ends March 31, subject to regulatory approval and customary closing conditions.

Methodist Healthcare System brings together many of San Antonio's most respected health care facilities and is an equal partnership between San Antonio-based Methodist Healthcare Ministries and HCA, a leading hospital provider with more than 160 hospitals and over 100 surgery centers in 20 states and the U.K. Beginning with its first quarter of fiscal 2011, which ends Dec. 31, MedCath will account for Texsan Heart Hospital as a discontinued operation for current and prior reporting periods.

The agreement marks MedCath's fifth transaction since announcing in March it had formed a Strategic Options Committee to consider the sale either of the entire company or its assets. In the past month, MedCath has announced the completion of sales involving its interests in Arizona Heart Hospital, Avera Heart Hospital of South Dakota, Heart Hospital of Austin and also a minority ownership its MedCath Partners division held in Southwest Arizona Heart and Vascular, LLC.

Since opening in 2004, the Texsan Heart Hospital has repeatedly distinguished itself with the quality care it provides. In 2009, the hospital received an Excellence Award from HealthGrades, the leading independent health care ratings organization. It was cited for being among the leading hospitals in America by Consumers' Checkbook survey, according to the May/June 2009 issue of AARP The Magazine. In September, it became one of only about 400 facilities nationwide to be recognized by Blue Cross and Blue Shield as a Blue Distinction Center for Cardiac Care, due to its commitment to quality care, resulting in better overall outcomes for cardiac patients. And earlier this year, it was named an American Society for Metabolic and Bariatric Surgery (ASMBS) Bariatric Surgery Center of Excellence®.

"Texsan Heart Hospital came into being as a result of the vision of local physicians who saw a way to bring world-class heart care to San Antonio and southwest Texas," said O. Edwin French, MedCath's president and CEO. "We're extremely proud of how we were able to help fulfill that vision."