OU Medicine, an affiliate of University Hospitals Authority and Trust, completes the acquisition of HCA’s interests in OU Medical System with a $900 million bridge financing and $175 million subordinated debt financing

February 1, 2018

OU Medicine, Inc., (“OU Medicine”) an affiliate of University Hospitals Authority and Trust (“UHAT”), has acquired the interests held by HCA Healthcare (“HCA”) in OU Medical System (“OUMS”), a joint operating company operated by HCA and UHAT. OU Medicine, a newly formed 501(c)3 corporation, completed the acquisition with a $900 million bridge financing (the “Senior Bridge Financing”) and $175 million subordinated debt issuance.

Proceeds from the combined nearly $1.1 billion financing were used to fund the acquisition of HCA’s interest in OUMS, provide liquidity on OU Medicine’s balance sheet, fund a portion of a bed tower expansion and redeem $42.4 million of outstanding UHAT bonds. The Senior Bridge Financing included $673.4 million of tax-exempt direct purchase senior bonds and a $232.5 million taxable senior loan. Additional funding came from $175.0 million of subordinated loans.

UHAT retained Cain Brothers as its exclusive M&A advisor to negotiate the termination of the existing joint operating agreement with HCA and evaluate ownership structures for OUMS. In addition, OU Medicine retained Cain Brothers as its exclusive Financial Advisor to assist in sourcing and structuring the Senior Bridge Financing, the subordinated debt financing and the permanent financing which priced in early March 2018.

OU Medicine was formed to own and operate OUMS, a health system of three acute care hospitals, an ambulatory surgery center and related clinics in and around Oklahoma City and the largest comprehensive research, teaching, and patient care health system in the State. OU Medicine’s vision is to be the premier enterprise for advancing health care, medical education and research for the community, state and region.

For more information, please contact:

James Moloney

Managing Director
Co-Head of Health Systems M&A
(415) 962-2961
jmoloney@cainbrothers.com

Bart Plank

Managing Director
Co-Head Healthcare Public Finance
(212) 981-6915
bplank@cainbrothers.com

James R. King

Managing Director
(415) 962-2959
jking@cainbrothers.com