Dr. Chris Phan will lead Northstar's Cancer Division
HOUSTON, TX, April 27 /PRNewswire-FirstCall/ - Northstar Healthcare Inc. (TSX: NHC) today announced that it entered into an agreement to acquire certain ownership interests in four physician owned radiation therapy cancer treatment centers from Dr. Chris Phan, a radiation oncologist. Dr. Phan is founder and Chief Executive Officer of Expert Oncology Network Solutions, LLC (EONS). EONS has been instrumental in developing and consulting with cancer centers across Texas. The acquired interests range from thirteen to thirty-six percent with the remaining ownership interests in the Texas based centers held by physician partners. Dr. Phan will join Northstar as the President of a newly formed cancer division.
The cancer treatment centers are located in Corpus Christi, San Antonio, west and north Houston. The centers utilize the latest technology in stereotactic radiation therapy systems by Varian Medical Systems (NYSE:VAR). This state of the art equipment, often found in academic centers of excellence, provides Northstar's cancer division with a unique differentiator. Northstar and Dr. Phan will manage the acquired cancer centers.
Dr. Donald Kramer, Chief Executive Officer of Northstar, stated, "We are excited about entering the oncology field through the acquisition of the radiation therapy centers. Dr. Phan and his team are a great addition to Northstar's management team and bring years of experience in the oncology field. This acquisition adds another service offering to Northstar's physician partnering model and complements our network of ambulatory healthcare facilities. The formation of the cancer division with Dr. Phan's leadership serves to further build our network of physician partners."
The U.S. radiation therapy market - estimated at $7 billion a year - is a highly unconsolidated industry. With approximately 2,000 freestanding or hospital-based centers offering radiation therapy, it is estimated that no single company currently owns more than five percent of the country's radiation centers.
Cancer is the second leading cause of death in the United States, with 1.5 million new cases expected to be diagnosed this year. Approximately 60 percent of cancer patients are treated with radiation therapy.
The purchase price for the facilities, including Northstar's portion of assumed debt, is expected to be approximately $5.6 million. The purchase price consideration of $2.7 million, excluding assumed debt, consists of $1.8 million in cash, $0.4 million in convertible promissory notes and $0.5 million in common stock of Northstar. Seventy-seven percent of the purchase price will be paid out over the next two years. The four cancer centers have all opened within the past 20 months with three of the centers opening within the past six months. The acquisition is expected to be finalized in June 2011 upon the completion of financial audits on the acquired entities, satisfactory due diligence review by Northstar, receipt of any necessary contractual, regulatory and governmental consents and approvals, and the absence of any material adverse change affecting the radiation therapy centers.
"I look forward to working with Dr. Kramer and the Northstar management team to develop Northstar's cancer division," stated Dr. Phan. "Northstar offers the structure and a platform through which we can grow this new division. With three of our four facilities less than six months old and a pipeline of new centers, we anticipate strong growth from the cancer division over the next twelve to twenty-four months."
Interim Chief Financial Officer Announced
Northstar also announced today that David Richardson, CFO, will be leaving the Company to assume the position of CFO with a private equity based healthcare company.
Mr. Thomas O. Foster, III, who currently serves as a director of Northstar Healthcare Inc. and Chairman of the Audit Committee, will serve as interim CFO.
"I want to thank David for his many contributions to Northstar," said Dr. Donald Kramer. "I'm grateful for the counsel and leadership he has provided. David was a major contributor during a pivotal time. He, along with the other members of the management team, have established a good financial foundation for the future."
Mr. Foster has been a Director of Northstar Healthcare Inc., since October 2010. Mr. Foster is an attorney and has focused his practice on multi-state and local taxation, federal and international taxation, and tax planning for individuals and entities. Mr. Foster was licensed as a Certified Public Accountant by the State of Texas in 1968. He obtained his Juris Doctor degree from Baylor University School of Law in 1964 and a B.B.A degree from Baylor University in 1961. In 1965, Mr. Foster received an L.L.M. degree in taxation from New York University.
About Northstar Healthcare Inc.
Northstar partners with physicians in the ownership and management of ambulatory facilities and healthcare services. Northstar owns and manages interests in three ambulatory surgery centers, two in Houston and the third in Dallas.
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SOURCE Northstar Healthcare Inc.