HCA's Recent Buyout Recalls 1989 Deal

The Tennessee Dickson Herald takes a look the two leveraged buyouts of Nashville-based HCA in as many decades and finds some similarities ? but more importantly, some substantial differences.

The first buyout occurred last month, at a record $33 billion (which included the assumption of $11.7 billion in existing debt). The earlier buyout — the trial run, say ? happened back in 1989, and was valued at $5.1 billion.

Through the magic of math, both buyouts worked out to roughly the same purchase price — $51 a share ? because of HCA?s strong presence on the stock market, the newer buyout is potentially worth billions more.

What hasn?t changed at all, for both buyouts, is Wall Street?s anxiety. It wasn?t fond of 1989?s deal, and it?s been none too pleased with July?s, either. In ?89, it was the way Medicare might or might not factor into the equation. Today, it?s the slow growth in HCA?s admissions coupled with the rapid growth of bad patient debt.