University General Health System, Inc. (University General) (OTCQB: UGHS), a diversified, integrated multi-specialty health care delivery system, today announced the closing of its purchase of South Hampton Community Hospital, a 122,000 square-foot (approx.) hospital in Dallas, and an adjacent 23,000 square-foot (approx.) medical office building. On December 4, 2012, the Company announced an agreement to acquire the 111-bed general acute care hospital, which is located less than 10 miles southwest of downtown Dallas, for $30.0 million.
Of the total purchase price, $1.5 million was paid by the Company and $28.5 million was financed by Texas-based First National Bank at a 4.25% interest rate in an agreement signed December 14, 2012. The loan principal will be amortized over 20 years, with a balloon payment due after 10 years. The Company plans to invest at least $1 million of additional capital into the hospital complex and to supply working capital, as needed, to support its business model of providing first-class health care service in a quality environment.
“The acquisition of our first flagship acute care hospital in the Dallas area represents an opportunity for University General to replicate the successful physician-centric, multi-specialty, integrated, diversified regional health care delivery system we have developed in the Houston metropolitan area,” stated University General Chairman and CEO Hassan Chahadeh, M.D. “We expect South Hampton Community Hospital, which will be renamed University General Hospital – Dallas, to contribute at least $40 million to the Company’s revenue and $15 million to adjusted EBITDA in the year ending December 31, 2013.”
“We have identified a number of other metropolitan markets as target opportunities for our regional health care delivery model,” added Donald Sapaugh, President of University General. “Initial evaluations of potential acquisitions in several of these markets, in addition to further opportunities in Houston and Dallas, are currently underway.”
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