Regional Health (“Regional” or the “Company”), the first and largest healthcare delivery system based in Eastern Washington, announced it has completed its secured debt financing in the amount of $35.4 million in connection with the Company’s acquisition of Yakima Regional Medical & Cardiac Center and Toppenish Community Hospital, which was completed on September 1, 2017.
To complete Regional’s purchase of the two hospitals, funds affiliated with Lapis Advisers, LP (“Lapis”) provided a financing commitment in 2016 and, upon receipt of regulatory approvals, closed on the financing commitment. The senior secured tem loan has several features in place to meet the needs of the Company, including the potential to (i) convert into a lower coupon, tax-exempt security, and (ii) pursue a short-term refinancing as market conditions permit. Importantly, the financing is structured to enable the Company to continue to expand its reach in the region and undergo replacement hospital construction for its Sunnyside Hospital subsidiary.
Regional acquired the 214-bed Yakima Regional Medical and Cardiac Center and 64-bed Toppenish Community Hospital for about $47 million. In 2016, the two hospitals generated approximately $140 million in net revenues.
Upon completion of the transaction, Regional Health became the largest non-profit hospital system based in Eastern Washington, with more than 1,400 employees, three hospitals, 14 medical clinics and 24 specialty clinics between the Tri-Cities and Yakima, said Regional Health spokeswoman Dawn O’Polka.
“We are proud to finance and help facilitate the powerful partnership that is Regional Health. We believe the management and its employees will deliver high-quality service to the community and patients in the region” said Basia Terrell, Managing Partner of Lapis. “The acquisition of Yakima and Toppenish enhances scale, but most importantly is anticipated to attract specialty physicians and bring them back to the region”.