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.
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.
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.