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8-K - FORM 8-K - VANGUARD HEALTH SYSTEMS INC | g25703e8vk.htm |
EX-99.1 - EX-99.1 - VANGUARD HEALTH SYSTEMS INC | g25703exv99w1.htm |
Exhibit 99.2
Vanguard Announces Offering of Senior Notes and Senior Discount Notes
NASHVILLE,
Tenn. January 19, 2011 Vanguard Health Systems, Inc. (Vanguard) announced today
that its wholly-owned subsidiaries, Vanguard Health Holding Company II, LLC (VHS Holdco II) and
Vanguard Holding Company II, Inc. (together with VHS Holdco II, the Senior Notes Issuers), plan
to issue an aggregate principal amount of $375.0 million of senior notes due 2019 (the Senior
Notes) and that Vanguard plans to issue senior discount notes due 2016 generating approximately
$375.0 million in gross proceeds (the Senior Discount Notes and, together with the Senior Notes,
the Notes), each in a private placement. The Senior Notes Issuers obligations under the Senior
Notes will be fully and unconditionally guaranteed on a senior basis by Vanguard, Vanguard Health
Holding Company I, LLC and certain subsidiaries of VHS Holdco II. The Senior Discount Notes will
not be guaranteed by any of Vanguards subsidiaries.
The Senior Notes Issuers intend to use the net proceeds from the Senior Notes offering for general
corporate purposes, including acquisitions, and the related transaction fees and expenses of both
notes offerings. Vanguard intends to use the proceeds from the Senior Discount Notes offering to
pay a dividend to its equityholders.
The Notes have not been registered under the Securities Act of 1933, as amended (the Securities
Act). The Notes may not be offered or sold within the United States or to U.S. persons, except to
qualified institutional buyers in reliance on the exemption from registration provided by Rule
144A and to certain persons in offshore transactions in reliance on Regulation S. You are hereby
notified that sellers of the Notes may be relying on the exemption from the provisions of Section 5
of the Securities Act provided by Rule 144A. This announcement does not constitute an offer to
sell or the solicitation of an offer to buy Notes in any jurisdiction in which such an offer or
sale would be unlawful.
Company Information and Forward Looking Statements
About Vanguard
Vanguard owns and operates 26 acute care and specialty hospitals and complementary facilities and
services in Chicago, Illinois; Detroit, Michigan; Phoenix, Arizona; Orange County, California; San
Antonio, Texas; and Massachusetts. Vanguards strategy is to develop locally branded,
comprehensive healthcare delivery networks in urban markets. Vanguard will pursue acquisitions
where there are opportunities to partner with leading delivery systems in new urban markets or to
increase its presence in existing markets. Upon acquiring a facility or network of facilities,
Vanguard implements strategic and operational improvement initiatives including expanding services,
strengthening relationships with physicians and managed care organizations, recruiting new
physicians and upgrading information systems and other capital equipment. These strategies improve
quality and network coverage in a cost effective and accessible manner for the communities Vanguard
serves.
This press release contains forward-looking statements within the meaning of the federal
securities laws which are intended to be covered by the safe harbors created thereby. Forward-looking statements are those statements that are based upon managements current plans and
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expectations as opposed to historical and current facts and are often identified in this release by
use of words including but not limited to may, believe, will, project, expect,
estimate, anticipate, and plan. These statements are based upon estimates and assumptions
made by Vanguards management that, although believed to be reasonable, are subject to numerous
factors, risks and uncertainties that could cause actual outcomes and results to be materially
different from those projected. These factors, risks and uncertainties include, among others,
Vanguards high degree of leverage and interest rate risk; Vanguards ability to incur
substantially more debt; operating and financial restrictions in Vanguards debt agreements;
Vanguards ability to generate cash necessary to service Vanguards debt; weakened economic
conditions and volatile capital markets; post-payment claims reviews by governmental agencies;
Vanguards ability to successfully implement Vanguards business strategies; Vanguards ability to
successfully integrate the acquisition of substantially all of the assets of The Detroit Medical
Center, Westlake Hospital and West Suburban Medical Center and future acquisitions; conflicts of
interest that may arise as a result of Vanguards control by a small number of stockholders; the
highly competitive nature of the healthcare industry; governmental regulation of the industry,
including Medicare and Medicaid reimbursement levels; pressures to contain costs by managed care
organizations and other insurers and Vanguards ability to negotiate acceptable terms with these
third party payers; Vanguards ability to attract and retain qualified management and healthcare
professionals, including physicians and nurses; potential federal or state reform of healthcare,
implementation of existing reform legislation and potential modifications to such legislation;
future governmental investigations; Vanguards ability to adequately enhance its facilities with
technologically advanced equipment; the availability of capital to fund Vanguards corporate growth
strategy; potential lawsuits or other claims asserted against Vanguard; Vanguards ability to
maintain or increase patient membership and control costs of its managed healthcare plans; changes
in general economic conditions; Vanguards exposure to the increased amounts of and collection
risks associated with uninsured accounts and the co-pay and deductible portions of insured
accounts; dependence on Vanguards senior management team and local management personnel;
volatility of professional and general liability insurance for Vanguard and the physicians who
practice at its hospitals and increases in the quantity and severity of professional liability
claims; Vanguards ability to maintain and increase patient volumes and control the costs of
providing services, including salaries and benefits, supplies and bad debts; increased costs from
further government regulation of healthcare and Vanguards failure to comply, or allegations of
Vanguards failure to comply, with applicable laws and regulations; the geographic concentration of
Vanguards operations; technological and pharmaceutical improvements that increase the cost of
providing, or reduce the demand for, healthcare services and shift demand for inpatient services to
outpatient settings; a failure of Vanguards information systems would adversely impact its ability
to manage its operations; costs and compliance risks associated with Section 404 of the
Sarbanes-Oxley Act of 2002; material non-cash charges to earnings from impairment of goodwill
associated with declines in the fair market values of Vanguards reporting units; and volatility of
materials and labor costs for potential construction projects that may be necessary for future
growth.
Although Vanguard believes that the assumptions underlying the forward-looking statements contained
in this press release are reasonable, any of these assumptions could prove to be inaccurate, and,
therefore, there can be no assurance that the forward-looking statements
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included in this press release will prove to be accurate. In light of the significant
uncertainties inherent in the forward-looking statements included herein, you should not regard the
inclusion of such information as a representation by Vanguard that its objectives and plans
anticipated by the forward-looking statements will occur or be achieved, or if any of them do, what
impact they will have on Vanguards results of operations and financial condition. Vanguard
undertakes no obligation to publicly release any revisions to any forward-looking statements
contained herein to reflect events and circumstances occurring after the date hereof or to reflect
the occurrence of unanticipated events.
Contact:
Vanguard Health Systems, Inc.
Gary Willis, Senior Vice President and Chief Accounting Officer
(615) 665-6098
Vanguard Health Systems, Inc.
Gary Willis, Senior Vice President and Chief Accounting Officer
(615) 665-6098