ONTARIO, Calif., Aug. 8, 2024 /PRNewswire/ -- Prime Healthcare Services, Inc.  (the "Company" or "Prime Healthcare") today announced that it has commenced a cash tender offer (the "Tender Offer") to purchase any and all of its outstanding 7.250% Senior Secured Notes due November 1, 2025 (the "Notes"). As of August 8, 2024, Prime Healthcare had $874,000,000 aggregate principal amount of notes outstanding. In conjunction with the Tender Offer, Prime Healthcare is soliciting consents (the "Consent Solicitation") to adopt certain proposed amendments to the indenture governing the Notes (the "Indenture") to eliminate certain of the covenants, restrictive provisions and events of default from such Indenture (collectively, the "Proposed Amendments") and to effect the release of liens on the collateral securing the Notes (the "Collateral Release").

Prime Healthcare is making the Tender Offer and Consent Solicitation pursuant to, and subject to the terms and conditions of, the Offer to Purchase and Consent Solicitation Statement, dated as of August 8, 2024 (as it may be amended or supplemented, the "Statement"). The Tender Offer will expire at 5:00 p.m., New York City time, on September 6, 2024, unless extended or earlier terminated as described in the Statement (such time and date, as they may be extended, the "Expiration Time").

Certain information regarding the Notes and the Tender Offer is set forth in the table below.

The "Total Consideration" per $1,000 principal amount of Notes validly tendered and accepted for purchase pursuant to the Tender Offer will be determined in the manner described in the Statement by reference to the applicable fixed spread (the "Fixed Spread") specified for the Notes in the table above over the yield to maturity (the "Reference Yield") based on the bid side price of the U.S. Treasury Security (the "Reference U.S. Treasury Security") specified in the table above, as calculated by Barclays Capital Inc. (the "Dealer Manager and Solicitation Agent") at 9:00 a.m., New York City time, on August 22, 2024 (subject to certain exceptions set forth in the Statement, such time and date, as the same may be extended, the "Price Determination Date"). The Total Consideration is inclusive of the applicable Early Participation Payment. The "Tender Offer Consideration" will equal the Total Consideration minus the Early Participation Payment.

Any Notes that have been validly tendered may be withdrawn at any time prior to 5:00 p.m., New York City time, on August 21, 2024, unless extended or terminated (such date and time, as the same may be extended, the "Withdrawal Deadline"). Holders who validly tender at or prior to 5:00 p.m., New York City time, on August 21, 2024 (the "Early Participation Deadline") (and not validly withdrawn at or prior to the Withdrawal Deadline), and accepted for purchase will receive the Total Consideration, which includes the Early Participation Payment. Holders of Notes (collectively, the "Holders") who validly tender $1,000 principal amount of Notes at or before 5:00 p.m., New York City time, on September 6, 2024, unless extended or terminated (such date and time, as the same may be extended, the "Expiration Time"), and not validly withdrawn, and whose Notes are accepted by Prime Healthcare, will be eligible to receive the Tender Offer Consideration, which does not include the Early Participation Payment. Holders of Notes validly tendered following the Early Participation Deadline, but on or prior to the Expiration Time, and accepted for purchase, will receive the Tender Offer Consideration (which will not include the Early Participation Payment). To be eligible to receive the Tender Offer Consideration, any withdrawn Notes must be validly re-tendered and not validly withdrawn prior to the Expiration Time. Only Holders that validly tender and deliver (and do not validly withdraw and revoke) their Notes and related consents at or prior to the Early Participation Deadline and whose Notes are accepted for purchase by Prime Healthcare will be entitled to receive the Total Consideration (including the Early Participation Payment) on the applicable Settlement Date. In addition to the Total Consideration or Tender Offer Consideration, as applicable, tendering Holders whose Notes are accepted for purchase pursuant to the Tender Offer will receive accrued and unpaid interest from the last interest payment date with respect to the Notes to, but not including, the applicable Settlement Date.

Holders may not deliver consents to the Proposed Amendments and Collateral Release in the Consent Solicitation without tendering Notes in the Tender Offer, and may not tender Notes in the Tender Offer without delivering consents to the Proposed Amendments and Collateral Release in the Consent Solicitation.

The "Early Settlement Date" will be, at the Prime Healthcare's option, any time on or after the Price Determination Date and prior to the Expiration Time, subject to the satisfaction or waiver of all conditions to the consummation of the Tender Offer and the Consent Solicitation, including the consummation of the Financing Condition (as defined below) and satisfaction of the Requisite Consents Condition (as defined below). The "Final Settlement Date" will be promptly after the Expiration Time. We refer to the Early Settlement Date and the Final Settlement Date as the "Settlement Date," as applicable.

Prime Healthcare's obligation to consummate the Tender Offer and Consent Solicitation are subject to the satisfaction or waiver of certain conditions, which are more fully described in the Statement, and include, among other things, (i) Prime Healthcare's issuance of $1.0 billion aggregate principal amount of senior secured notes due 2029 and the completion of one more or more debt financing transactions in an amount that is sufficient to fund the purchase of all of the outstanding Notes and to pay all fees and expenses associated with such financing and the Tender Offer and Consent Solicitation (the "Financing Condition") and (ii) the solicitation of consents representing at least 66-2/3% in aggregate principal amount of the Notes outstanding (the "Requisite Consent Condition").

To the extent any Notes are not tendered and accepted for purchase pursuant to the Tender Offer, Prime Healthcare may choose, but has no obligation, to satisfy and discharge the Indenture governing the Notes by sending a notice of redemption to the trustee under the Indenture for the redemption of all outstanding Notes on November 1, 2024, at a price equal to 100.00% of the aggregate principal amount of the Notes to be redeemed, plus accrued and unpaid interest up to, but not including, the date of redemption.

Prime Healthcare is soliciting consents from the Holders (i) to the Proposed Amendments to eliminate certain covenants, restrictive provisions and events of default applicable to the Notes, which will be effected by the execution and delivery of a supplemental indenture to the Indenture, containing the Proposed Amendments and (ii) to effect the release of liens on the collateral securing the Notes. The consent of the Holders of at least a majority in aggregate principal amount of the Notes outstanding will be required to give effect to the Proposed Amendments. The consent of the Holders of at least 66-2/3% in aggregate principal amount of the Notes outstanding will be required to give effect to the Collateral Release.

Barclays Capital Inc. is acting as the Dealer Manager and Solicitation Agent for the Tender Offer and Consent Solicitation.  D.F. King & Co., Inc. is serving as the Depositary and Information Agent. Copies of the Statement and related tender offering materials may be obtained by contacting the Information Agent at (212) 269-5550 (banks and brokers) and at (888) 605-1958 (all others) or by email at primehealthcare@dfking.com. Questions regarding the Tender Offer should be directed to Barclays at +1 (212) 528-7581 (collect) and +1 (800) 438-3242 (toll free).

None of the Prime Healthcare or its subsidiaries, their respective Boards of Directors, the Dealer Manager and Solicitation Agent, the Depositary and Information Agent, the trustee for the Notes, or any of their respective affiliates, is making any recommendation as to whether Holders should tender any Notes in response to the Tender Offer or deliver any consents in response to the Consent Solicitation. Holders must make their own decision as to whether to tender any of their Notes or deliver any consents and, if so, how many Notes to tender and consents to deliver. This press release is for informational purposes only and does not constitute an offer to sell, the solicitation of an offer to buy or the solicitation of tenders or consents with respect to any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful. The Tender Offer and Consent Solicitation is being made solely by means of the Statement. In those jurisdictions where the securities, blue sky or other laws require any tender offer or solicitation of consents to be made by a licensed broker or dealer, the Tender Offer and Consent Solicitation will be deemed to be made on behalf of the Company by the Dealer Manager and Solicitation Agent or one or more registered brokers or dealers licensed under the laws of such jurisdiction.

This release contains "forward-looking statements" within the meaning of securities laws. You should not place undue reliance on these statements. Such forward-looking statements include statements regarding the ability of the Company to satisfy the financing condition and receive the requisite consents to the Proposed Amendments. Forward-looking statements include information concerning our liquidity and our possible or assumed future results of operations, including descriptions of our business strategies. These statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "seek," "will," "may" or similar expressions. These statements are based on certain assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate in these circumstances. As you read this release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions. Many factors could affect our actual financial results and could cause actual results to differ materially from those expressed in the forward-looking statements. Some important factors include: our ability to grow our business, successfully integrate acquisitions, and efficiently manage growth; our reliance on our key senior management team and local management personnel; a failure of our back office infrastructure could adversely impact our ability to manage our operations; changes in general economic and employment conditions; the impact of the pandemics, such as COVID-19, and natural disasters; the geographic concentration of our operations, which make us sensitive to local regulatory and economic changes; our ability to enter into favorable contracts with managed care plans; our exposure to the increased amounts of and collection risks associated with uninsured accounts and the copay and deductible portions of insured accounts; current and potential lawsuits or other claims asserted against us; the challenges posed by the competitive nature of the healthcare industry, including competition and increasing costs related to recruiting talented staff and competition hampering our ability to acquire additional hospitals on favorable terms; potential acquisitions could be costly, unsuccessful or subject us to material unexpected liabilities; our failure to adequately upgrade our facilities with technologically advanced equipment; the potential impact of a cybersecurity incident or other forms of data breaches and any resulting litigation, government inquiries, and damage to our reputation; our ability to attract and retain qualified management and healthcare professionals, including physicians and nurses; cost containment efforts and reductions in reimbursement rates applicable to Medicare and Medicaid programs including in connection with federal budget sequestration or changes in budgetary priorities by state and local governments; the efforts of insurers, healthcare providers, patients and others to contain healthcare costs, including reductions or adjustments in reimbursement rates under federal and state healthcare programs; rankings based on clinical outcomes, cost, quality, patient satisfaction and other performance indicators; continued growth of uninsured and "patient due" accounts; ineffective implementation of our electronic information systems or a failure in such system could adversely affect our operations; any unfavorable negotiations with our labor unions, labor disruptions or increased labor costs and any litigation concerning or with our medical staff; the extent of distributions to our controlling stockholder; our continued capital expenditures and other commitments associated with ongoing acquisitions; the small number of stockholders, our related party transactions and our controlling stockholder's affiliation with the company that provides much of our insurance coverage; our eligibility to participate in the Medicare and Medicaid programs; existing and future federal and state antitrust regulations; our pension liabilities and funding obligations; any potential responsibilities and costs under environmental laws; governmental regulation of the industry, including Medicare and Medicaid reimbursement levels as well as construction, acquisition or expansion of hospitals; our requirement to treat patients with emergency medical conditions regardless of ability to pay; the impact from healthcare reform efforts, including legal challenges to, and efforts to, repeal, replace, or change, the Patient Protection and Affordable Care Act, as amended; any potential penalties or required changes following failure to comply with laws and any impacts from complying with federal and state privacy laws, including the Health Insurance Portability and Accountability Act of 1996, as amended; any changes to or discontinuation of California's Hospital Quality Assurance Fee Program; failure to implement information systems to comply with coding requirements; state efforts to regulate the construction or expansion of healthcare facilities; risks related to climate change; expectations with respect to environmental, social and governance-related initiatives; our high degree of leverage and our ability to incur substantially more debt or refinance existing debt; and interest rate risk.

In light of these risks, uncertainties and assumptions, the forward-looking statements contained in this release might not prove to be accurate and you should not place undue reliance upon them. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties.

Prime Healthcare is headquartered in Ontario, California and operates 44 hospitals and has more than 300 outpatient locations. Prime Healthcare provided approximately 2.6 million patient visits in 2023. It is one of the nation's leading health systems with nearly 45,000 employees and affiliated physicians. Fourteen of the Prime Healthcare hospitals are members of the Prime Healthcare Foundation, a 501(c)(3) not-for-profit public charity.

Media Contact: 
Elizabeth Nikels / 909-235-4305 enikels@primehealthcare.com 

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SOURCE Prime Healthcare Services, Inc.