Iasis buying back $120M in shares

Deleveraging event a 'good sign'

Email | Print By Erin Lawley

Franklin hospital operator Iasis Healthcare today announced the repurchase of $120 million worth of preferred stock from its investor group, which is led by Texas Pacific Group, JLL Partners and Trimaran Fund Management.

The buyback included accrued and outstanding dividends. It was funded with excess cash on hand.

“Our ability to repurchase $120 million in preferred stock without accessing the capital markets or impacting the strategic direction of the Company speaks to our financial strength and competitive positioning,” said Chairman and CEO David White.

Local RBC Capital Markets analyst Frank Morgan said paying off high-coupon debt like this — it had an 11.75 percent interest rate — is a sign of the company's success.

"If things weren't going well, they wouldn't be generating the cash flow to allow them to do this," he said.

The buyback is the second major financial move in a week by a local hospital venture. Vanguard Health Systems last Thursday said it will refinance its entire balance sheet.

Iasis also made news last week when it was named a "front runner" among potential buyers of an Alabama facility. On its most recent earnings call, Iasis discussed plans to be proactive in seeking out potential acquisition targets.