Near $800m price tag for Medical Associates
The name will survive the ownership change, but other adjustments are coming for the 64-year-old Medical Associates hospital.
This, as new owners Caribbean Health Systems Limited, CHS, closed on a deal worth more than three quarters of a billion dollars to acquire the multi-disciplinary operation at Tangerine Place, in the Half-Way Tree area of Kingston.
CHS is a Jamaican owned but St Lucian registered company in which Dr David Walcott, Ryan Reid, Douglas Halsall, Dr Michael Banbury, Kevin Donaldson and Kirk-Anthony Hamilton are partners though their different companies.
Shareholdings in CHS are held by Novamed Inc, which is the majority owner, as well as FirstRock Real Estate Investments and Health Ventures Limited.
Donaldson, through another of his companies, Roots Financial Group, acted as arranger for the deal. He told the Financial Gleaner that the consortium closed the acquisition at US$5 million – which is around $775 million in local currency, based on spot foreign exchange rates.
Plans for the takeover of the private hospital by the three companies behind the CHS consortium were first disclosed in May 2022.
NovaMed Inc is a partnership between David Walcott, Kurt Hamilton and Kevin Donaldson, a former investment banker with Sagicor Investments Jamaica; while Health Ventures, which was incorporated in September 2020, is owned equally by Dr Michael Banbury, businessman Doug Halsall, and FirstRock Group Chairman and CEO Ryan Reid. The three men behind Health Ventures are also directors of FirstRock.
Medical Associates was previously owned by a consortium of medical professionals, with attorney Conrad George as chairman.
George had no comment on impending deal, last May, and did not respond to messages and calls placed since the deal was announced on Monday.
At the time of the proposed takeover, the price tag was touted at about $1 billion, but the final figure is closer to $800 million, Donaldson said of the cash deal .
Donaldson and others are also part of another consortium which acquired the contiguous Knutsford Court Hotel which is accessible from Ruthven Road and Chelsea Avenue, the latter gateway being next door to the back gate of the Medical Associates hospital.
Knutsford Court is currently being transformed into a commercial hub to be known as The Summit.
“The connection will be that they share common major shareholder in NovaMed, which is myself, Kirk and David. As a result of that connection there are things that we will do jointly that will benefit both entities,” Donaldson said.
Walcott will become the executive chairman and managing director of Medical Associates. He will co-chair the healthcare facility with Dr Michael Banbury, who was the CEO for Medical Associates up to May 2022.
CHS intends to transform Medical Associates into “a national icon of quality healthcare”, Walcott said.
“I’m spending a lot of time with the team at the hospital, listening and trying to understand the needs that are there,” he added, while noting that CHS took charge of the operations on February 22.
“We are committed to putting in what will make it work. There will be changes three months from now and there will be even more changes nine months from that,” Walcott added about his immediate plans.
Donaldson says Medical Associates will continue to operate as normal, for now.
“The independent operators lease space for the hospital and that will continue. It will all remain so, once it makes good financial sense,” he said.
“We’re operating a hospital but we also want to grow the entity and make it better. For starters, the kerb appeal of the plant needs a lot of work and the internal facilities are aged; so there will have to be some upgrades.”
As for the long-term horizon: “We look at it through these lenses: make it viable, make it sustainable and make all stakeholders happy to participate in the facility. That includes that staff who have to work there and the clients who want to utilise a world-class facility,” he said.
Medical Associates is currently a 24-bed facility that the new owners plan to double within a year to 18 months.
The size of the capital expenditure to upgrade the facility is still being determined, but the information will be released once the budget has been finalised, Donaldson said.