HCA, headquartered here in Nashville, may be going private in an announcement expected today (according to Reuters and other media sources). There have been rumors of this for weeks. HCA owns hospitals and other healthcare businesses throughout much of the US and operates several facilities Great Britain.
Participating in the highly leveraged private equity buyout is some members of the Frist family (Dr. Thomas Frist, Sr. co-founded HCA with Jack C. Massey, benefactor of Belmont’s Graduate School of Business).
Leveraged buyouts are an interesting case study, and this one will likely be no different. The usual short-term outcome is finding ways to streamline assets to only the most profitable, and seeking other cost-cutting measures. More money has been amassing in firms specializing in leveraged buyouts as other investment options have become less lucrative.
Dr Jeff Cornwall
Co-founder of The Entrepreneurial Mind, serial entrepreneur and professor of entrepreneurship.
Or could it be instead of short term profit seeking, the buyout group wants to improve healthcare in ways that can’t be done with wall street expectations. Investing in IT technology that improves patient safety but doesn’t satisfy net present value targets for wall street as an example…….just an opinion of course.
Public companies face so much pressure from Wall Street that they focus so much enegery in managing the short-term goals of the business and not the long-term goals. I think that if this buyout is successful, the leadership at HCA can improve the company’s business in many ways that they couldn’t as a public company. This is exciting since it is happening right in our own back yards. It will also be interesting to see how it affects the big accounting firms in Nashville.