Province Healthcare — Merger or Acquisition (August 2004)
23 slides from Province Healthcare's merger presentation, Aug 17, 2004
Slide 1: Serving the Non-Urban Community
"SERVING THE NON-URBAN COMMUNITY"
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This document may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are statements that could be deemed forward-looking statement
Slide 3: Additional Information
ADDITIONAL INFORMATION In connection with the proposed transaction, LifePoint Hospitals and Province Healthcare intend to file with the Securities and Exchange Commission ("SEC") a joint proxy statement/prospectus, as part of a Registration Statement on Form S-4, and other relevant materials. The jo
Slide 4: Today's Presenters
TODAY'S PRESENTERS Kenneth Donahey Chairman, President and Chief Executive Officer - LifePoint Hospitals Marty Rash Chairman and Chief Executive Officer - Province Healthcare Bill Gracey Chief Operating Officer - LifePoint Hospitals Mike Culotta Chief Financial Officer - LifePoint Hospitals
Slide 5: LifePoint to acquire Province in a cash and stock transaction
LifePoint to acquire Province in a cash and stock transaction $11.375 / share in cash Shares of stock, subject to the following collar mechanism: 0.3447 of a share if LifePoint's average share price at closing is below $33.00. a number of shares equal to $11.375 if LifePoint's average share price at
Slide 6: LifePoint and Province - A Natural Combination
Pure play non-urban, community-based health care provider 50 hospitals with approximately 5,285 beds in 19 states 47 of 50 hospitals are sole community providers Shared corporate strategy and values Combined revenues and EBITDA to exceed $1.7 billion and $340 million, respectively (1) Both Company's
Slide 7: Acquisition Rationale
ACQUISITION RATIONALE Achieves operational and financial scale and provides a platform to continue to grow in the non-urban hospital market A foundation of strong, established hospitals in growing markets Enhances our geographic diversity, expanding into 10 additional states Significant upside in Pr
Slide 8: Creates Significant Critical Mass
CREATES SIGNIFICANT CRITICAL MASS Hospitals and licensed beds represent current acute care facilities as of June 2004 and does not include de novos Adjusted for recent divestitures
Slide 9: Diversifies Revenue Stream
DIVERSIFIES REVENUE STREAM Number of Hospitals 30 hospitals 20 Hospitals 50 hospitals Largest Ten Hospitals (1) 55% Revenue 73% Revenue 44% Revenue Largest State (1) 34% Revenue 21% Revenue 17% Revenue Average Revenue/Hospital $30.2 Million $40.2 Million $33.4 Million LifePoint Pro Forma Province Ba
Slide 10: Expanding Our Geographic Footprint
EXPANDING OUR GEOGRAPHIC FOOTPRINT
Slide 11: Key Growth Opportunities
KEY GROWTH OPPORTUNITIES Las Cruces (New Mexico) Fort Mohave (Arizona) Coastal Carolina (South Carolina) 286 bed full-service tertiary hospital Fastest population growth in New Mexico and 11th fastest in U.S. County-run hospital, under- managed with previously negative EBITDA Province knows the faci
Slide 12: Significant Margin Expansion Opportunity
SIGNIFICANT MARGIN EXPANSION OPPORTUNITY Quarterly EBITDA Margin 1999 - Present Significant Earnings and Margin Upside from Province's Facilities
Slide 13: Shared Cultures and Values
SHARED CULTURES AND VALUES Expanding the scope and quality of care for patients Supplying the necessary equipment and resources to physicians Creating an outstanding work environment for employees Strengthening the hospital's central role within the community Managing financial performance responsib
Slide 14: Financial Discussion
FINANCIAL DISCUSSION
Slide 15: Transaction structure, sources and uses
LifePoint will give Province shareholders between approximately 14.5 million and 17.1 million shares, representing approximately 27% and 31% of Pro Forma shares outstanding The cash consideration to stockholders (excluding cashing out options) will be $565.3 million Additionally, the transaction wil
Slide 16: Pro Forma Capitalization
PRO FORMA CAPITALIZATION LifePoint Province Adjustments LTM Pro Forma June 30, 2004
Slide 17: Potential Synergies
POTENTIAL SYNERGIES Expected Savings Salaries and Benefits of Executive Officers $5.0 - $6.0 Salaries and Benefits of Other Duplicative Positions $4.0 - $5.0 Retirement Plan (1) $3.2 Other Corporate Costs $3.0 - $4.0 Total Synergies (2) $15.2 - $18.2 Synergy Exclusive of ESOP costs Note: The Company
Slide 18: Potential Synergies and Timing
POTENTIAL SYNERGIES AND TIMING Expected Timing of Synergies Impact on LTM EBITDA of 100% Synergies This transaction will generate significant synergies $151.6 Includes $2.0 million adjustment for River Parishes acquisition Includes $12.4 million adjustment for Las Cruces acquisition and $2.3 million
Slide 19: Comparative Statistic Graphs
COMPARATIVE STATISTIC GRAPHS Combined Revenue Growth Combined EBITDA Growth 20.5% CAGR 20.9% CAGR 12.8% CAGR 20.2% CAGR LifePoint Province
Slide 20: Financing
FINANCING Citigroup has committed to arrange a $1.725 billion senior secured credit facility consisting of: $400 million revolving credit facility (undrawn at closing) $1.325 billion Term Loan B This financing package is a permanent financing and provides LifePoint with certainty of execution No "br
Slide 21: EPS Accretion
EPS ACCRETION Based on our internal review, we expect the transaction to be immediately accretive on an earnings per share basis Before the acquisition, our 2005 EPS guidance would be $2.27 to $2.37; the acquisition increases this range to $2.35 to $2.45, representing approximately $0.08 accretion a
Slide 22: Summary
SUMMARY
Slide 23: LifePoint and Province - A Key Strategic Step
LIFEPOINT AND PROVINCE - A KEY STRATEGIC STEP Value Creation Critical Mass Vision Transaction unlocks shareholder value of $15.2 - $18.2 million in synergies resulting from the Acquisition Significant upside in non-mature markets and de novo facilities Experienced management team that is focused on
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