Surgical Alliance Names Chairman and Completes Financing
Nashville, TN - October 2, 2002 -- Surgical Alliance Corporation, which will focus on partnering with physicians to develop, acquire and manage specialty surgical hospitals and freestanding outpatient surgical facilities, today announced it has completed $115.6 million in financing and named Rock A. Morphis as its chairman.
Started last summer by former OrthoLink Physicians Corporation executives G. Edward Alexander, Jr. and Kenneth N. Hancock, the company already has its first hospital under construction — a 42-bed, ten-operating room orthopaedic hospital located in New Albany, OH.
Previously chief financial officer of OrthoLink, Alexander will be president and chief executive officer (CEO) of Surgical Alliance Corp. and Hancock will serve as executive vice president and chief development officer. Additional officers of the company are Richard D’enbeau, president of Surgical Alliance’s hospital division and Catherine Gerzina, executive vice president of operations.
Alexander said the $15.6 million in equity funding was led by Wachovia Capital Partners, Charlotte, NC. and included the participation of Noro-Moseley Partners, Atlanta, GA. The company also closed a $100 million line of credit, supplied by Health Care REIT, Inc., Toledo, OH.
Brentwood Capital Advisors acted as exclusive financial advisor to Surgical Alliance Corporation in the transaction, Alexander said.
Surgical Alliance Corporation will operate in the rapidly growing outpatient surgery center and specialty surgical hospital markets. According to industry research, surgeries performed in outpatient settings have increased 191% in the last full decade. Specialty surgical hospitals are those focusing on providing only surgical services and typically maintain 40 or fewer beds. They serve outpatients and inpatients, allowing more support and convenience to the patient and the physician.
Thomas C. Wylly II, Brentwood Capital Advisors partner, said, “We are delighted to play a part in this successful financing for this talented and highly regarded management team. When we began working with them, we believed their strategy of developing new specialty surgical hospitals in partnership with leading orthopaedic physicians would deliver superior financial returns for shareholders and therefore would be embraced by institutional investors. In a challenging funding environment, we were able to develop strong interest in the transaction among institutional investors, which resulted in the selection of strong financial partners Wachovia and Noro-Moseley.”
David Grams, a principal with Wachovia Capital Partners, added “Surgical Alliance Corp.’s strategy of partnering with leading local market physicians to provide the best in orthopaedic patient care should provide a great platform for success.”
Surgical Alliance Corp.’s New Albany project, located near Columbus, is being developed in partnership with 30 leading Columbus-area orthopaedic physicians and will be open in the fall of next year, Alexander said. Additionally, Surgical Alliance and its New Albany physician partners will join with Ohio University to incorporate a state-of-the-art research and education facility on its campus in Columbus.
“We believe the New Albany project is a reflection of many of the values that set Surgical Alliance apart,” Alexander said. “We are building much more than ambulatory surgical centers and specialty hospitals. We are developing a health care facility designed for patient-focused care, academic excellence, and world-class research in the field of orthopaedics.”
There is opportunity for companies that understand the importance of being flexible to partner physicians, hospitals and other parties in the health care delivery process in order to deliver superior care to patients, Alexander said. “Our team has the ability to identify and prioritize the objectives of each project’s key constituents, allowing for the most efficient delivery of quality care to patients,” he said.
“We are especially happy to welcome Rock Morphis into our organization,” Alexander continued. “He brings a complimentary set of skills, an outstanding track record, and great integrity to help us shape this company into a leading operator of ambulatory surgery centers and specialty surgical hospitals.”
In addition to joining Surgical Alliance Corp., Morphis, is chairman and chief executive officer of Heritage Health Systems and is a founder and managing director of Heritage Group, LLC. He has extensive experience in the surgery business having served previously as chairman and CEO of Heritage Surgical Corporation and later as chairman and CEO of Surgical Health Corporation until it merged with HealthSouth in 1995.
Prior to helping found OrthoLink in 1996, Alexander served as chief financial officer of Team Health, Inc., the hospital-based physician-contracting subsidiary of MedPartners. For seven years, he was senior vice president of finance and treasurer of Medaphis Corporation, the largest provider of business services to hospitals and physicians in the country.
Hancock was chief development officer for OrthoLink from May 2000 until May 2001 and from January 1996 to May 2000, he was senior vice president of business development, instrumental in the development of numerous surgical diagnostic and rehabilitation centers. He served for eleven years in various capacities with DePuy Corporation, the second largest manufacturer of orthopaedic surgical products in the world. He was president and chief executive officer of DePuy-Hancock, an independent distributor of surgical products serving the Southeast.
About Wachovia Capital Partners
Wachovia Capital Partners, formerly First Union Capital Partners, is the private equity affiliate of Wachovia Corporation, the nation’s fourth largest bank holding company. Since inception in 1988, Wachovia Capital Partners has invested over $2.5 billion in more than 150 portfolio companies. The firm targets growth equity, leveraged recapitalization, and buyout investments of $10 to $50 million in growth industrial, business services, financial services, media and communications, health care and energy opportunities.
About Noro-Moseley Partners
Noro-Moseley Partners, an Atlanta-based venture capital firm, was organized in 1983 to find, acquire, and manage investments in a limited number of private, diversified small and medium-sized growth companies located primarily in the Southeast. Since 1983, Noro-Mosely Partners has created five limited partnership funds totaling approximately $580 million in capital and has invested in more than 115 companies, among them MedAlliance, REN Corporation, and Direct Insurance of Nashville.
About Brentwood Capital Advisors
Brentwood Capital Advisors, founded in 1999, is a Nashville-based investment banking firm specializing in raising capital and advising growing middle-market health care and business services companies. Brentwood Capital is headed by Kevin L. Murphy and Thomas C. Wylly II. Murphy was formerly head of the Private Capital Group of SunTrust Equitable Securities’ Investment Banking Division. Wylly was previously co-head of the Corporate Finance Department of J.C. Bradford & Company. Among the company’s clients are Psychiatric Solutions, Inc., and KEYS Group Holdings, LLC.
About Health Care REIT, Inc.
Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust that invests in health care facilities, primarily skilled nursing and assisted living facilities. At June 30, 2002, the company had investments in 229 health care facilities in 34 states and had total assets of approximately $1.5 billion. For more information on Health Care REIT, Inc., via facsimile at no cost, dial 1-800-PRO-INFO and enter the company code - HCN.
Surgical Alliance Corporation is headquartered at One Burton Hills Boulevard, Nashville.
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