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8-K - 8-K - PROSPECT MEDICAL HOLDINGS INC | v57052e8vk.htm |
EX-2.2 - EX-2.2 - PROSPECT MEDICAL HOLDINGS INC | v57052exv2w2.htm |
EX-2.1 - EX-2.1 - PROSPECT MEDICAL HOLDINGS INC | v57052exv2w1.htm |
Exhibit 99.1
CONTACT:
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-OR- | INVESTOR RELATIONS: | ||
Prospect Medical Holdings, Inc.
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The Equity Group Inc. | |||
Linda Hodges, Investor Relations
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Devin Sullivan | |||
(714) 796-4271
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(212) 836-9608 | |||
linda.hodges@prospectmedical.com
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dsullivan@equityny.com |
FOR IMMEDIATE RELEASE
PROSPECT MEDICAL HOLDINGS, INC. TO BE ACQUIRED
BY LEONARD GREEN & PARTNERS, L.P. AND MANAGEMENT FOR $8.50 PER SHARE
BY LEONARD GREEN & PARTNERS, L.P. AND MANAGEMENT FOR $8.50 PER SHARE
Los Angeles, CA August 16, 2010 -Prospect Medical Holdings, Inc. (Nasdaq: PZZ) (Prospect or
the Company) announced today that it has entered into a definitive merger agreement to be
acquired for $8.50 per share in cash by an entity sponsored by Leonard Green & Partners, L.P. in
which certain stockholders of Prospect will also participate. The total transaction value is
approximately $363 million, including the assumption of approximately $158 million in Prospects
net debt.
The merger price represents a 38.9% premium over the closing sale price of Prospect shares on
August 13, 2010, and a 29.4% premium to the volume weighted-average closing sale price of
approximately $6.57 during the 30 trading days prior to that date.
The merger is subject to approval by Prospect stockholders holding a majority of Prospects
outstanding shares, the expiration or termination of the applicable antitrust waiting period, and
other customary closing conditions. The merger is not subject to a financing condition.
Prospects board of directors, acting on the unanimous recommendation of a Special Committee of
independent directors, has approved the merger agreement, determined that the merger is fair to and
in the best interests of Prospect and its stockholders, and recommended that Prospect stockholders
adopt the merger agreement. On behalf of the Special Committee of the board of directors of
Prospect, we are pleased to have reached an agreement that will enable us to deliver significant
and certain value to our stockholders, said Glenn Robson, Chairman of the Special Committee.
Some directors and officers of Prospect that currently own in the aggregate approximately 10.4
million shares of Prospects outstanding common stock (representing nearly 50% of Prospects
outstanding shares) have entered into a voting agreement in which they have agreed to vote all of
their Prospect shares in favor of the adoption of the merger agreement. These stockholders also
have agreed to exchange approximately 6.2 million of their Prospect shares for equity interests in
the sponsored purchasing entity in lieu of their receipt of the cash
merger consideration for those shares.
Under the merger agreement, Prospect has the right to solicit competing acquisition proposals from
third parties during the 40-day period ending September 25, 2010. UBS Investment Bank will assist
Prospects Special Committee in connection with the solicitation. Prospect does not intend to
disclose developments regarding this process, unless the Special Committee and Prospects board of
directors reach a decision regarding any superior proposals that may be made. There is no assurance
that this process will result in a superior proposal. In addition, Prospect may, at any time,
subject to the terms of the merger agreement, respond to unsolicited proposals.
Upon a change of control of the Company, each holder of the Companys
outstanding 123/4% Senior Secured Notes Due 2014 will be entitled to require the Company to repurchase all or a portion of the
holders notes at a purchase price in cash equal to 101% of the principal amount of the notes plus accrued and unpaid interest, if any.
Funds affiliated with Leonard Green & Partners, L.P. have agreed to backstop the Companys obligation to repurchase any
notes that are presented.
UBS Investment Bank is acting as financial advisor to the Special Committee and Locke Lord Bissell
& Liddell LLP is acting as legal advisor to the Special Committee. TroyGould PC is acting as legal
advisor to Prospect. Latham & Watkins LLP is acting as legal advisor to Leonard Green & Partners,
L.P.
About Prospect
Prospect Medical Holdings owns and operates five community-based hospitals in the greater Los
Angeles area, and manages the provision of healthcare services of HMO enrollees in southern
California, through its network of specialist and primary care physicians. Prospect Medical
Holdings website can be found at www.prospectmedicalholdings.com.
About Leonard Green & Partners, L.P.
Leonard Green & Partners is one of the nations leading private equity firms with over $9 billion
in equity commitments under management, was founded in 1989, and has invested in 51 companies with
an aggregate value in excess of $42 billion. The firms investments are focused primarily on North
American companies in a range of industries including retail, consumer products, distribution,
media, business services and healthcare. Additional information is available at
www.leonardgreen.com
Forward-Looking Statements
This press release contains statements that do not directly or exclusively relate to historical
facts. Such statements are forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements include statements regarding the
merger. These statements are based on the current expectations of management of Prospect, but
there are a number of risks and uncertainties that could cause actual results to differ materially
from these forward-looking statements. These risks and uncertainties include, among others, the
possibility that (1) Prospect may be unable to obtain stockholder approval or satisfy other
conditions required for the consummation of the merger, (2) the closing of the merger may be
delayed or abandoned, (3) the merger may involve unexpected costs, (4) the business of Prospect may
suffer as a result of uncertainty surrounding the merger, and (5) Prospect may be adversely
affected by other economic, business or competitive factors. Additional factors that may affect the
future results of Prospect are set forth in its filings with the Securities and Exchange Commission
(SEC), including its Form 10-K for the year ended September 30, 2009, which are available at
http://www.sec.gov. Unless required by law, Prospect undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information, future events or
otherwise.
Additional Information About the Merger and Where to Find It
In connection with the proposed merger, Prospect expects to file with the SEC a proxy statement and
other materials. INVESTORS AND STOCKHOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND THESE OTHER
MATERIALS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
PROSPECT AND THE PROPOSED MERGER. Once filed with the SEC, the proxy statement and such other
documents will be available without charge at www.sec.gov and on Prospects website at
www.prospectmedicalholdings.com under SEC Filings, or by directing such request to Linda Hodges
at (714) 796-4271.
Participants in the Solicitation
Prospect and its directors, executive officers and other members of its management and employees
may be deemed to be participants in the solicitation of proxies from the stockholders of Prospect
in connection with the proposed merger. Information concerning the interests of these directors,
executive officers and other members of Prospects management and employees in the proposed merger
will be included in Prospects proxy statement referenced above. Information regarding Prospects
directors and executive officers is also available in its Annual Report on Form 10-K for the year
ended September 30, 2009 and in its proxy statement for its 2010 Annual Meeting of Stockholders,
which documents are on file with the SEC. These documents are available free of charge at the
SECs website at www.sec.gov and from Prospect as described above.
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