| | Effective as of 12:01 A.M. on September 1, 2011, VHS Valley Health System, LLC (“VHS-Valley”), a subsidiary of registrant Vanguard Health Systems, Inc. (the “Registrant”), and VHS-Valley’s subsidiaries and/or affiliates, VHS Harlingen Hospital Company, LLC, VHS Brownsville Hospital Company, LLC, VHS Valley Holdings, LLC, VHS Valley Real Estate Company, LLC and Vanguard Health Financial Company, LLC (collectively, the “Buyer”), acquired substantially all of the assets (collectively, the “Assets”) used in the hospital businesses (the “Hospital Businesses”) known as (i) Valley Baptist Medical Center, a 586-bed acute care hospital in Harlingen, Texas, and (ii) Valley Baptist Medical Center – Brownsville, a 280-bed acute care hospital located in Brownsville, Texas, as well as the assets of certain other incidental healthcare businesses, joint ventures, physician practices and medical office buildings operated as part of such Hospital Businesses, except for cash, cash equivalents and certain other excluded assets. The Assets were purchased from Valley Baptist Health System, Valley Baptist Medical Center, Valley Baptist Medical Center – Brownsville, Valley Baptist Medical Development Corporation, VB Realty Corporation, VB Realty II, LLC, Valley Baptist Insurance Holdings, Inc., Valley Baptist Hospital Holdings, Inc. and Valley Baptist Management Services Corporation (collectively, the “Seller”). The Registrant’s cash investment in VHS-Valley, funded with available cash on the Registrant’s balance sheet, was approximately $210 million, the proceeds of which were used by the Buyer to purchase the Assets. In addition, VHS-Valley assumed approximately $15 million of indebtedness and other liabilities of the Seller and issued a 49% equity interest to Valley Baptist Medical Center – Brownsville, one of the Sellers. Thus, after the closing of the transaction, VHS-Valley is a joint venture that is owned 51% by a wholly-owned subsidiary of the Registrant and 49% by a Seller. The cash portion of the purchase price paid by Buyer for the Assets is subject to working capital and certain other customary post-closing adjustments once the closing balance sheets for the Hospital Businesses become available. The Hospital Businesses reported audited revenues of approximately $510 million for the fiscal year ended August 31, 2010 and are expected to report revenues of approximately $525 million for the fiscal year ended August 31, 2011. There is no material relationship, other than in respect of this transaction, between any Seller and the Registrant or any of its affiliates (or any director or officer of the Registrant or any associate of any such director or officer). At the date of this Form 8-K, the Registrant is not certain whether the acquisition of the Assets requires it to report this acquisition under Item 2.01 of Form 8-K. The Registrant is unable to make this determination because the Seller’s financial statements for its most recently completed fiscal year prior to the acquisition, August 31, 2011, are not currently available. If the Registrant later concludes that this acquisition requires filing under Item 2.01 of Form 8-K, the Registrant will amend this Form 8-K and include any required audited financial statements of the Seller and pro forma financial information of the Registrant within 71 days after September 8, 2011, the date by which this Form 8-K was required to be filed. |
