Health Care Transactions

Health Care Mergers and Acquisitions Experience

• Blue Shield of California, California’s largest nonprofit health insurer, as the winning bidder in the active auction process for the acquisition of Care1st Health Plan—a full-service Los Angeles-based health plan offering multiple health care options that include Medicare, Medi-Cal Health, Medi-Cal Dental, Healthy Families and commercial coverage. Manatt also advised on structuring and negotiating and provided strategic transactional advice in the acquisition, helping Blue Shield executives accomplish their longtime goal of entering the Medi-Cal market.
• Blue Shield of California, a founding member of California Integrated Data Exchange (Cal INDEX), in the merger of Cal INDEX and Inland Empire Health Information Exchange (IEHIE), a combination that created Manifest Medex, one of the nation’s largest and most comprehensive nonprofit health information exchanges. Cal INDEX, a California nonprofit mutual benefit corporation founded by Blue Shield and Anthem in 2015, contributed over 11 million claims records to the Manifest Medex platform, with IEHIE contributing over 5 million clinical patient records.
• Children’s Medical Center of Dallas in the acquisition of the assets of Our Children’s House, a pediatric rehabilitation inpatient and outpatient line of business, from an affiliate of Baylor Scott & White Healthcare, and in the conclusion of a series of related transition services agreements.
• HealthSmart Holdings, a health care provider, in connection with the acquisition of the health plan network business of American Caresource.
• Monroe Plan for Medical Care in its acquisition of a 50 percent interest in a Western New York health plan named Univera Community Health. UCH will operate as a joint venture between the Monroe Plan and Excellus Health Plan, a large Blue Cross carrier. The firm’s involvement included developing the joint venture structure, negotiating transaction documents and obtaining necessary regulatory approvals.
• SCL Health System, a nonprofit health care organization, in:
  • Its acquisition of Denver-based Platte Valley Medical Center. This acquisition is part of SCL Health System’s initiative to increase its presence across the continuum of care in identified strategic geographies.
  • The sale of the assets of St. Francis Health in Topeka, KS, to Topeka Health System LLC, a joint venture entity formed by Ardent Health System and the University of Kansas Health System. The transaction was unique and complex for many reasons, including that it involved a transfer of assets from a not-for-profit, Catholic health system to a for-profit, nondenominational JV, which implicates various statutes and transaction-related approvals by the state attorney general, as well as the archbishop of the local diocese and the Holy See in Rome.
• Tenet Healthcare Corp. in the acquisition of Hi-Desert Medical Center in Joshua Tree, CA, from the Hi-Desert Memorial Health Care District (a public entity). The transaction included a general acute care hospital, skilled nursing facility, home health agency, hospice and other outpatient services. Tenet purchased the operational assets of the district and entered into a long-term ground lease including much-needed capital improvement and rent structures. The transaction also required the approval of voters in the district.
• UCSF Medical Center in the completion of its acquisition of Children’s Hospital & Research Center of Oakland. Under the agreement, Children’s Oakland has been clinically linked with UCSF’s Benioff Children’s Hospital, but UCSF Medical Center and Children’s Oakland has retained separate licenses and boards. The public-private partnership is the most comprehensive provider of pediatric services in Northern California and has created a leading clinical care and academic program with national recognition. Combined, the hospitals are among the top ten largest children’s health care providers in the country.
• UC San Diego Health System in multiple joint venture transactions with Surgical Care Affiliates to expand the health system’s network of ambulatory surgery centers.

Health Care Financing Experience

• Blue Shield of California in connection with its investment in PriMed Management Consulting Services, a California-based management services organization. Blue Shield, Anthem Blue Cross of California, Dignity Health and Hill Physicians Medical Group all bought shares in PriMed from the organization and certain of its founders. The change in ownership will lay the groundwork for an expanded, integrated health care delivery system that will provide management services to providers throughout Northern California.
• Dignity Health, a California-based not-for-profit corporation that operates hospitals and ancillary care facilities in 17 states, in:
  • Its closing of a $270 million tax-exempt bond financing, a $400 million taxable term loan from Bank of America Merrill Lynch and a $250 million taxable term loan from Sumitomo Mitsui Banking Corp. These transactions will allow for the refinancing of approximately 20 percent of Dignity Health’s senior debt.
  • Its $600 million in taxable bond issuances, together with six letter of credit substitutions by various financial institutions in the aggregate amount of $373.76 million. The transactions involved extensive drafting and negotiation with respect to documentation, diligence, filings and opinions.
  • Its $585 million tax-exempt bond financing. The transaction involved $200 million for new construction, the refunding of $257 million of variable-rate demand bonds and the repayment of $125 million of short-term bank debt. 
  • Its $628 million tax-exempt bond financing. We served as borrower’s counsel in the transaction, which consisted of two fixed-rate public bond issues: one for $350 million through the California Health Facilities Financing Authority and the other for $128 million through the Arizona Health Facilities Authority. Our team also closed a separate $150 million private purchase variable-rate issue through the California Health Facilities Financing Authority, which was sold on a “forward purchase” basis.
• Sucampo Pharmaceuticals Inc., a global biopharmaceutical company, in connection with an underwritten public offering of common stock by its founding shareholders for an aggregate offering of $64.4 million (including full exercise of the underwriters’ greenshoe option). Manatt also advised Sucampo on the launch of a $20 million at-the-market offering.
• Yale New Haven Hospital Inc., the medical center that hosts the Yale School of Medicine, as financing counsel in connection with the closing of a $232 million financing consisting of a fixed-rate tax-exempt issue, a variable-rate tax-exempt issue credit enhanced by Wells Fargo, and a taxable issue. The capital was used to refinance line-of-credit indebtedness incurred in connection with Yale New Haven’s acquisition of the operating assets of The Hospital of St. Raphael in New Haven. We were Yale New Haven’s counsel in connection with that line of credit financing as well.
• Yale New Haven Health System, the largest and most comprehensive health care system in the state of Connecticut, in connection with its formation of an obligated group for bond financing purposes. The deal involved the refinancing of all of the pre-existing bond indebtedness of both Yale New Haven and Bridgeport Hospital. It also involved the issuance of new-money indebtedness and the issuance of five series of tax-exempt bonds totaling $543 million, and a series of taxable bonds totaling $50 million.