Surgery Partners to acquire NovaMed for $214 million

NovaMed, Inc. (NASDAQ:NOVA)("NovaMed" or the "Company"), a leading operator of ambulatory surgery centers in partnership with physicians, today announced that it has entered into a definitive merger agreement to be acquired by an affiliate of Surgery Center Holdings, Inc. ("Surgery Partners") in a transaction valued at approximately $214 million, including the assumption or repayment of approximately $105 million of indebtedness. Surgery Partners is an affiliate of H.I.G. Capital, LLC, a leading global private equity investment firm. The merger agreement was unanimously approved by NovaMed's board of directors, including a special committee of independent directors.

“We believe this transaction will be beneficial for all parties involved, including shareholders, physician partners, patients and payors alike. We remain excited about the prospects for the ASC industry as a whole and look forward to building on Surgery Partners' market leading position.”

Under the terms of the merger agreement, NovaMed stockholders would receive $13.25 per share in cash, representing a premium of 54.6% over the closing price of NovaMed's common stock as of the time of Surgery Partners' initial offer on August 2, 2010; a 17.7% premium over the Company's 90 day average closing price; and a 10.7% premium over the Company's 30 day average closing price.

The transaction is expected to close in the second quarter of 2011, subject to customary closing conditions, including customary antitrust and regulatory approvals. Further, the transaction is subject to the approval of the merger agreement by holders of a majority of the outstanding shares of the Company's common stock. Certain NovaMed directors and officers that in the aggregate own approximately 10.5% of NovaMed's outstanding shares have entered into agreements with Surgery Partners to vote in favor of the merger.

"We are excited about NovaMed and Surgery Partners joining forces in our efforts to establish the preeminent ambulatory surgery center ("ASC") provider in the country," said Christopher Laitala, Managing Director of H.I.G. Capital. "We believe this transaction will be beneficial for all parties involved, including shareholders, physician partners, patients and payors alike. We remain excited about the prospects for the ASC industry as a whole and look forward to building on Surgery Partners' market leading position."

Mike Doyle, CEO of Surgery Partners, said, "We extend a very warm welcome to the NovaMed team and look forward to leveraging the strengths of both companies to provide the optimal outcome for our patients, physicians and employees. We would also like to congratulate NovaMed's management team on their accomplishments. We look forward to a bright future ahead."

Jefferies Finance LLC and THL Credit, Inc. have committed to provide debt financing for the transaction.

NovaMed will file a preliminary proxy statement with the SEC, which will contain detailed information about the transaction and the board and special committee process. Once the SEC completes its review of the preliminary proxy statement, NovaMed will file the definitive proxy statement with the SEC and distribute it to stockholders.

William Blair & Company is serving as financial advisor and DLA Piper LLP (US) is serving as legal advisor to NovaMed's board of directors. McDermott, Will and Emery LLP is serving as legal advisor to H.I.G. Capital and Surgery Partners.

Source:

 NovaMed

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