Prime Healthcare Services Announces Early Results of Cash Tender Offer and Related Consent Solicitation for Any and All of its Outstanding 7.250% Senior Secured Notes due 2025

ONTARIO, Calif., Aug. 21, 2024 /PRNewswire/ -- Prime Healthcare Services, Inc.  (the "Company" or "Prime Healthcare") announced that it has received valid consents from holders (the "Holders") of at least 66-2/3% in aggregate principal amount of the Company's outstanding 7.250% Senior Secured Notes due 2025 (the "Notes"), sufficient to adopt the Proposed Amendments (as defined herein) and effect the Collateral Release (as defined herein) pursuant to the previously announced cash tender offer (the "Tender Offer") for any and all outstanding Notes and the related solicitation of consents from the Holders of the Notes (the "Consent Solicitation"). The Tender Offer and Consent Solicitation are being made 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").

At 5:00 p.m., New York City time, on August 21, 2024 (the "Early Participation Deadline"), according to information provided by the Depositary and Information Agent (as defined below) for the Tender Offer and Consent Solicitation, $866,038,000 aggregate principal amount of the Notes had been validly tendered and not validly withdrawn (and consents thereby validly delivered and not validly revoked). The consents received in the Consent Solicitation from the Holders of at least 66-2/3% in aggregate principal amount of the Notes outstanding (the "Requisite Consents") permit the Company to effect certain amendments to the indenture, dated as of October 30, 2020, governing the Notes (the "Indenture"), which would (i) eliminate certain covenants, restrictive provisions and events of default applicable to the Notes (collectively, the "Proposed Amendments") and (ii) release the liens on the collateral securing the Notes (the "Collateral Release"), in each case, upon the terms and subject to the conditions set forth in the Statement. Accordingly, the Company will execute a supplemental indenture (the "Supplemental Indenture") to the Indenture to effect the Proposed Amendments and the Collateral Release. Although the Supplemental Indenture will become effective upon execution thereof, the Proposed Amendments and the Collateral Release will not become operative unless and until the Notes with respect to which the Requisite Consents have been delivered are paid for and the Proposed Amendments and Collateral Release shall be deemed to be revoked if such purchase applicable thereto shall not occur.  Prime Healthcare's obligation to consummate the Tender Offer is subject to the satisfaction or waiver of certain conditions, which are more fully described in the Statement, and include, among other things, Prime Healthcare's completion of the Financing Transaction described in the Statement (the "Financing Condition").

Withdrawal rights for the Tender Offer and Consent Solicitation expired at 5:00 p.m., New York City time, on August 21, 2024, concurrently with the Early Participation Deadline. Accordingly, Notes validly tendered and not validly withdrawn in the Tender Offer and Consent Solicitation may no longer be withdrawn, and delivered consents may no longer be revoked.

The table below summarizes the results of the Tender Offer and Consent Solicitation as of the Early Participation Deadline.

The "Total Consideration" offered 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 for the Notes in the table above, as calculated by the Dealer Manager and Solicitation Agent (as defined below) at 9:00 a.m., New York City time, on August 22, 2024 (such time and date, the "Price Determination Date"). The Total Consideration is inclusive of the applicable Early Participation Payment specified for the Notes in the table above (the "Early Participation Payment").

As previously announced, in order to be eligible to receive the Total Consideration with respect to the Notes, Holders must have validly tendered Notes and delivered their related consents at or prior to the Early Participation Deadline. Upon the terms and subject to the conditions set forth in the Statement, Holders who validly tender Notes after the Early Participation Deadline but at or prior to 5:00 p.m., New York City time, on September 6, 2024 (such date and time, as it may be extended, the "Expiration Time") will be eligible to receive only the "Tender Offer Consideration" for the Notes validly tendered, which is equal to the Total Consideration minus the Early Participation Payment. 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 (as defined below).

The Company has the option, at any time on or after the Price Determination Date and prior to the Expiration Time (the "Early Settlement Date"), to purchase the Notes that were validly tendered at or prior to the Early Participation Deadline and not subsequently validly withdrawn, subject to the Financing Condition and all of the other conditions of the Tender Offer and Consent Solicitation having been satisfied or waived by the Company. The Company expects that the Early Settlement Date will be August 29, 2024, subject to the satisfaction of the Financing Condition. The Tender Offer and Consent Solicitation will expire at the Expiration Time. 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.

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 [email protected]. Questions regarding the Tender Offer should be directed to Barclays at +1 (212) 528-7581 (collect) and +1 (800) 438-3242 (toll free).

No Offer or Solicitation

None of the Prime Healthcare or the guarantors of the Notes, 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 or the solicitation of an offer to buy 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 is being made solely by means of the Statement. In those jurisdictions where the securities, blue sky or other laws require any tender offer to be made by a licensed broker or dealer, the Tender Offer 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.

Cautionary Statement on Forward-Looking Statements

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 the other conditions to the Tender Offer. 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.

About Prime Healthcare Services, Inc.

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.

SOURCE Prime Healthcare Services, Inc.

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