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Rockdale Hospital Authority Selects Signature Hospital Corporation to Purchase Hospital

Posted on: Wednesday, 29 August 2007, 12:13 CDT

Signature Hospital Corporation was selected yesterday to purchase and lead Rockdale Medical Center by the Board of Trustees of the Hospital Authority of Rockdale County and the Board of Directors of Rockdale Medical Center Inc., officials announced.

The decision follows a careful and deliberate evaluation by members of both hospital boards who spent more than a year exploring the options for strengthening the Hospital and ensuring access to quality hospital care for the residents of Rockdale County.

Yesterday's decision is the first step of a public approval process that is expected to take several months. The purchase of the Hospital by Signature for approximately $90 million requires the review and approval of the Attorney General of the State of Georgia.

"We have found in Signature an experienced hospital operator that will commit to the Hospital the resources and tools it needs to successfully serve this community," says Ethel Boyle, Chair of the Board of Directors of Rockdale Medical Center Inc.

"Our decision to sell the hospital will allow Rockdale to successfully emerge from the financial and operational issues that we, along with our employees and physicians, have worked so hard to overcome. While we have made significant progress, a sale to Signature brings access to capital, management and support systems that will ensure our long-term vitality in ways that we cannot on our own."

Rockdale Medical Center is a Joint Commission accredited 138-bed hospital that serves Rockdale County, Georgia, and surrounding communities. Located approximately 25 miles east of Atlanta, the hospital provides acute care, diagnostic, emergency and outpatient services.

In 2002, Rockdale embarked on a Master Facility Plan, which significantly updated the hospital and elevated its status as a state-of-the-art provider in the metro Atlanta area. Since then, the hospital has had difficulty in meeting the bond covenants of the debt incurred to fund that expansion.

While the Hospital has made progress in the past year -- it was successful in meeting its bond covenants for Fiscal Year 2006 after not meeting them in 2005 -- the organization must have an infusion of capital to secure the long-term financial stability needed to deliver excellent patient care. With the purchase of the Hospital by Signature, the hospital's debt will be erased and the Rockdale community will benefit from new tax revenue.

"A community partnership with Signature will allow us to capture the full potential of the investments we have already made, and will allow us to make new and needed investments in medical equipment and services so that the Hospital can serve our fast-growing community on a long-term basis," says Bill Rogers, Chair of the Hospital Authority of Rockdale County.

As part of their evaluation process, members of the Authority and Board, as well as representatives of the medical staff and hospital administration, visited community hospitals operated by a number of potential purchasers, including Signature, and spoke privately with physicians, nurses, employees and community leaders there.

"We liked what we saw in Signature," Rogers says. "We chose the company from among a group of interested parties because of their commitment to quality healthcare in communities similar to Conyers, where the hospital is not only a trusted, respected provider of care, but also a cornerstone of the community."

Highlights from the purchase agreement approved by the boards include:

A purchase price of approximately $90 million. The final figure will be determined at the time the transaction is concluded, which will follow the approval of state officials. (With these proceeds, the Hospital Authority and the Medical Center will pay off all debt.)

The lease between the Hospital Authority and Rockdale Medical Center, Inc. will be terminated and all funds remaining after the sale - after payment of all debt and expenses - will be held by the Hospital Authority and used for charitable healthcare services throughout Rockdale County.

A commitment by Signature to additionally invest at least $32 million in the Hospital over the next five years in capital expenditures to include facility improvements and expansion of services, new medical equipment and for other hospital needs.

Establishment of a Rockdale Medical Center community healthcare fund that will receive at least $4 million from Signature over the next 10 years and will be used to fund and support community healthcare projects.

Offers of employment to all Hospital employees at the time of closing and full credit for the current years of service and rates of pay.

Local representation on the Signature Hospital Corporation Board of Directors and on the Rockdale Medical Center Board of Trustees.

A commitment by Signature to maintain the hospital's core general acute care services, including emergency services and obstetrics.

A commitment by Signature to provide the same level of indigent care that the hospital provides today.

"Signature is honored to have been selected by the Authority and Medical Center Boards," says Charles R. Miller, President and Chief Executive Officer of Signature.

"We see tremendous opportunity to further strengthen the Hospital's role as a trusted provider of care in Rockdale County. Conyers is a great, fast-growing community and we are delighted to join the employees, physicians and patients that make the Hospital such a great place to receive care."

This announcement marks the beginning of a public process, which is governed by Georgia law through the Attorney General's office. Within approximately two weeks of yesterday's announcement, the Hospital Authority of Rockdale County, Rockdale Medical Center and Signature will submit a filing with the Georgia Attorney General.

A public hearing will be held in Rockdale County approximately 60 days after that filing. The purpose of this hearing is to provide full disclosure of the purpose and terms of the proposed purchase, as well as an opportunity for local public input in order to ensure that the public's interest is protected when the proposed disposition is completed.

About Rockdale Medical Center

Rockdale Medical Center is a 138-bed licensed hospital serving Conyers, Ga., and surrounding communities. Located about 25 miles east of Atlanta, Rockdale Medical Center is accredited by the Joint Commission as well as The American College of Surgeons Commission on Cancer. For more information, please visit www.rockdalemedicalcenter.com.

About Signature

Based in Houston, Texas, Signature Hospital Corp. is a privately held company dedicated to providing affordable, state-of-the-art medical services to communities in which it owns and operates hospitals.

Anchored by a strong commitment to patient safety, backed by proprietary technology for measuring and improving quality in its hospitals, Signature presently owns and operates four hospitals: 115-licensed bed Pampa Regional Medical Center in Pampa, Texas; 161-licensed bed Gulf Coast Medical Center in Wharton, Texas; 79-licensed bed Medical Park Hospital in Hope, Ark., and 325-licensed bed St. Joseph's Hospital, in Parkersburg, W. Va.

Signature's board and management team boast more than two centuries of combined experience in healthcare management and finance. Signature's financial partner is Goldman Sachs, the nation's premier investment banking firm. For more information on Signature, please visit www.signaturehospital.com.

Source: Business Wire

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