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Triad agrees to be taken private in $4.7-billion sale

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From the Associated Press

Triad Hospitals Inc. said Monday that it had agreed to be taken private in a $4.7-billion sale to an affiliate of Goldman Sachs Group Inc. and a firm spun off from JPMorgan Chase & Co.

The Triad announcement comes on the heels of hospital giant HCA Inc.’s sale to private owners.

The hospital industry is struggling with flat volume and a rising number of unpaid bills from uninsured patients. Triad said Monday that its provision for “doubtful accounts” would equal one-eighth of its revenue in the fourth quarter and cut into earnings.

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Still, analysts said, hospital companies generate huge amounts of cash, making them attractive buyout targets.

Triad agreed to be purchased for $50.25 a share, a 16% premium over Triad’s closing stock price Friday. The buyers, affiliates of CCMP Capital Advisors and GS Capital Partners, will also assume $1.7 billion in debt.

Shares of Plano, Texas-based Triad rose $6.38, or 14.7%, to $49.65.

Triad’s board has approved the agreement and recommended that stockholders approve it. The sale is subject to regulatory approvals, but there are no financing conditions, the companies said.

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James D. Shelton, Triad’s chairman and chief executive, said the sale was in the best interests of the company and its stockholders. A deal had been considered likely since October, when Shelton told analysts that he was “having some good conversations” with two or three private-equity firms and would continue talking.

Analysts said there could be another bid for the company, either from another private-equity firm -- Blackstone Group is believed to be interested -- or a rival hospital operator.

Triad has 40 days to solicit better offers, and it would pay a relatively light $40-million penalty for walking away from CCMP.

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