Ornda Healthcorp And St. Luke's Health System Sign Definitive Agreement For Purchase Of St. Luke's Health System In Phoenix, Arizona

Business Wire, Nov 11, 1994

NASHVILLE, Tenn.--(BUSINESS WIRE)--Nov. 11, 1994--OrNda HealthCorp (Nasdaq/NM:ORND) and St. Luke's Health System jointly announced today that a definitive agreement has been executed for the acquisition of the three hospitals and related businesses that comprise St. Luke's Health System ("St. Luke's") by a subsidiary of OrNda HealthCorp from St. Luke's Health System and its affiliates.

For the twelve months ended June 30, 1994, the total revenue and net income of St. Luke's were $144.2 million and $5.0 million, respectively. The purchase price for St. Luke's will be $122 million, subject to certain adjustments, and will be payable in $3 million of OrNda's common stock with the balance in cash.

Consummation of the transaction is subject to the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, approval of the lenders under OrNda's $700 million Credit Agreement, issuance of licenses by the Arizona Department of Health Services, and certain other customary closing conditions.

Charles N. Martin, Jr., chairman and chief executive officer of OrNda HealthCorp, said, "This transaction, which will be accretive to earnings, is consistent with our strategy of creating integrated delivery systems in our key markets. The addition of the three St. Luke's hospitals to OrNda's two existing hospitals in the Phoenix area enhances OrNda's ability to offer comprehensive services and provides increased access to managed care providers." David Zacharias, chairman of St. Luke's Board of Trustees, said, "The St. Luke's Board's strategic goal of becoming a part of an integrated system of primary care physicians, specialists and hospitals is realized through the action taken by the Board today. Further, St. Luke's long-standing tradition of providing quality health care to the Valley will continue as the medical facilities become the hub of OrNda's regional integrated network in Arizona. In addition, the proceeds from the sale will be used to endow St. Luke's, a charitable trust focused on improving the health of Arizona citizens, continuing the St. Luke's commitment to the Arizona community."

OrNda HealthCorp is the fifth largest investor-owned hospital management company in the United States. It is a leading provider of health care services, delivering a broad range of inpatient and outpatient health care services principally through the operation of 46 hospitals located in urban and suburban communities in 15 states. St. Luke's owns three hospitals: St. Luke's Medical Center, which includes a 241-bed acute care hospital and St. Luke's Skilled Nursing Facility, a 55-bed nursing care institution, in Phoenix; Tempe St. Luke's Hospital, a 110-bed acute care hospital in Tempe; and St. Luke's Behavioral Health Center, an 86-bed behavioral health hospital in Phoenix. Other related businesses include Advantage Health, which is an AHCCCS plan, and certain clinics and rehabilitation services.

CONTACT: OrNda HealthCorp

              Keith B. Pitts or Douglas W. Hall, 615/383-8599
                               or
              St. Luke's Health System
              Terry Ashoff Johnson, 602/251-8862