HCA, the former Hospital Corporation of America, agrees to sell itself to a group of investors in a deal valued at more than $21 billion. The HCA board has approved the deal, which it plans to recommend to shareholders. But other bidders could emerge: The deal includes a provision allowing HCA's board to solicit better offers.
The investment firms taking part in the deal include Merrill Lynch, Bain Capital and Kohlberg, Kravis, Roberts.
While it may not be a household name, HCA owns 176 hospitals and 92 ambulatory surgery centers, making it the largest hospital chain in the country. The family of Senate Majority leader William Frist, which founded the company, will also retain a significant equity position.
The move is an attempt by the company to respond to changes in the industry. The marketplace for hospitals right now is very tight, with specialty hospitals emerging that often take the most lucrative business for themselves.
That trend has left hospital chains like HCA with a dwindling pool of uninsured patients and costly treatment cases. HCA said today that its profit for the second quarter of this year was $295 million, down from $405 million a year earlier.