HealthSouth Corporation has signed an agreement to sell its Diagnostic Division to The Gores Group private equity firm for approximately $47.5 million. The transaction is expected to be completed by the end of June or early in Q3 2007, and is subject to customary closing conditions, including regulatory approval.
This announcement reflects a “strategic repositioning of HealthSouth as a post-acute healthcare provider, focusing on inpatient rehabilitative services. We have now entered into definitive agreements for the sale of all three of our ambulatory divisions. As with the sale of the other two divisions, the proceeds from this transaction will be used to pay down a portion of our long-term debt," said Jay Grinney, HealthSouth president and chief executive officer.
For The Gores Group’s part, the firm “is excited about the strength of the Diagnostic Division's platform and geographic footprint, creating numerous opportunities for expansion within the imaging industry. The Diagnostic Division's existing infrastructure, coupled with Gores' financial support, will allow for accelerated growth through state-of-the art imaging equipment and superior patient care," said Ryan Wald, managing director, The Gores Group.
It is anticipated that the operations of the division will remain headquartered in Birmingham, Ala. HealthSouth will provide certain corporate support services to the new company for an interim period.
In addition to this sale, over the past 12 months, HealthSouth has realized $20.5 million in cash for divestitures of a number of individual diagnostic imaging facilities, as well as various equipment and assets owned by the division.