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Illiana Surgery Center in New Hands

Posted on: Tuesday, 21 March 2006, 00:00 CST

By Keith Benman, The Times, Munster, Ind.

Mar. 21--MUNSTER -- The Illiana Surgery Center has been pulled through a rough patch and is on its way back to full health and vigor, according to the private equity group that now owns the surgery center.

Wright Capital Partners on Monday completed its $83 million acquisition of the for-profit Illiana Surgery Center, related clinics and its real estate holdings throughout Northwest Indiana, according to Wright Chairman and CEO Leroy Wright.

"We thought it was an asset that had a tremendous amount of potential," Wright said of the surgery center. "We thought it wasn't realizing its potential because it was under-capitalized."

Since taking control of Illiana Surgery Center last October, Wright Capital Partners has turned the business around and will make it profitable going forward, Wright said.

The surgery center, at 701 Superior Ave., ran into financial difficulties more than one year ago, with employees complaining of bounced paychecks and unpaid medical claims. Those problems have been corrected, and the center will now concentrate on growing its business, Wright said.

Dr. Vijay Gupta will stay on as medical director. Dr. Hilton Hudson, a University of Chicago heart surgeon who does surgery at the center, will serve as its corporate compliance officer.

Dr. Jeffrey Yessenow will be chief executive officer of the new company, TWG Illiana Surgery and Medical Center. Yessenow, 54, has been active as a physician in Northwest Indiana since 1981.

"This is one of the most exciting times of my life and for the history of Illiana Surgery Center and the Northwest Indiana community," Yessenow said Monday.

Wright and Yessenow were interviewed Monday at the surgery center just minutes after Illiana Healthcare Inc. shareholders approved the sale.

Those shareholders are receiving a $40 million mix of stock and cash for the business, Wright said. Gupta and many others are staying on with the new organization. Wright Capital Partners laid out about $43 million for Illiana Surgery Center's real estate holdings.

There is intense competition between the area's large non-profit hospitals and for-profit operators like Illiana Surgery Center. The non-profits accuse Illiana and others of "cherry-picking" the most lucrative patients and leaving the indigent and uninsured to them.

Illiana opened as an outpatient surgery center in 1994. It received its hospital license in 2000, putting it into direct competition with area non-profit hospitals.

In October, Illiana Surgery Center sold off its Broadwest Surgery Center in Merrillville for $6 million. It also sold off a surgery center in Justice, Ill.

Both of those were sold in order to allow Wright Capital Partners to concentrate its efforts at the Illiana Surgery Center and its remaining affiliated clinics, Wright said. Those affiliated clinics are the Jones Clinic, in Munster, and the seven Women Wellness Center locations in Northwest Indiana.

TWG Illiana Surgery and Medical Center also has acquired real estate in Munster, Merrillville and Schererville as part of the deal, Wright said.

The Illiana Surgery Center will concentrate on making itself a center for cardiovascular excellence, women's health and orthopedic services, Yessenow said.

New services may be developed next door at 20 acres the center owns. Under consideration are a center for men's health, a birthing center and an oncology center.

A look at Wright Capital Partners' $83 million deal for Illiana Surgery Center

Wright Capital Partners, a private equity firm based in Chicago, completed its acquisition of the Illiana Surgery Center and affiliated clinics Monday. It took control of the for-profit health system in October and promptly began to retool it. In January, it divested itself of Illiana's Broadwest Surgery Center, in Merrillville.

WHAT WAS BOUGHT

Illiana Surgery Center, Munster General surgery, cardiac surgery, family practice, and other medical services

Women's Wellness Centers, seven locations in NW Indiana Women's health services

Jones Clinic, Munster Family practice, occupational health, radiology, other medical services

Real estate holdings in Munster, Schererville and Merrillville

WHAT WAS DIVESTED

Broadwest Surgery Center, Merrillville Justice Surgery Center, Justice, Ill.

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Copyright (c) 2006, The Times, Munster, Ind.

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Source: The Times

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