A Medical Device Daily

Renal Advantage (Brentwood, Tennessee), the fourth largest provider of dialysis services in the U.S., reported that it has entered into a definitive agreement to acquire the assets of seven dialysis centers currently owned by Riverside Hospital, a subsidiary of Riverside Health System (RHS; both Newport News, Virginia).

The seven facilities are located in Newport News, Williamsburg, Gloucester and Smithfield, Virginia.

Renal Advantage will enter into a 10-year relationship with Riverside that is intended to maintain access to renal care services in the current markets served by RHS. The transaction is expected to close by the end of June. Other terms of the transaction were not disclosed.

RHS facilities include hospitals, physician offices, outpatient centers, long term care facilities, retirement communities and other services.

Renal Advantage provides dialysis services to patients with chronic kidney failure. Including this newest transaction, the company said it now provides services to about 7,400 patients in 80 dialysis facilities in ten states.

Thomson (Stamford, Connecticut) reported that it has acquired MercuryMD (Research Triangle Park, North Carolina), a provider of mobile information systems serving the healthcare market. Terms of the transaction were not disclosed.

MercuryMD supplies healthcare providers with mobile solutions to improve clinical workflow and operational efficiencies. The employees of MercuryMD, including founders Drs. Alan Ying and William Lawson, will become employees of Thomson.

Specifically, MercuryMD will become part of Micromedex (Greenwood Village, Colorado), a Thomson Scientific and Healthcare business.

Together, MercuryMD and Micromedex said they will leverage their content, technology and expertise to provide evidence-based clinical knowledge integrated into tools such as laptops and PDAs.

“As part of Thomson, we will accelerate the global delivery of next-generation mobile information systems to more than 3,400 hospitals in North America and 7,000 institutions worldwide, something that we could not achieve independently,” said Ying who is also the company's CEO.

Thomson is the parent company of Thomson BioWorld (Atlanta), publishers of Medical Device Daily.

In other dealmaking news:

• Community Health Systems (CHS; Brentwood, Tennessee) reported the acquisition of Mineral Area Regional Medical Center (Farmington, Missouri), which is 80 miles south of St. Louis.

The seller of the 135-bed facility was a local non-profit corporation and the facility was acquired by a wholly owned subsidiary of CHS.

The hospital provides a full range of services and the assets acquired include several physician practices and a home health agency.

CHS operates general acute care hospitals in non-urban communities throughout the country. Through its subsidiaries, it currently owns, leases or operates 75 hospitals in 22 states.

• Nationwide Health Properties (Newport Beach, California) reported that it has completed the acquisition and master leaseback of the 32-facility, ten-state real estate holdings of Hearthstone Assisted Living (Houston).

In tandem with the transaction, Hearthstone's president and CEO Tim Hekker and partners acquired 100% ownership of the company that will operate the Hearthstone facilities.

The portfolio's current occupancy rate is more than 89% with rent coverage of 1.2x (over 1.0x after a 5% management fee and $300 per unit capital expenditure reserve).

NHP will receive rent on its estimated total investment of $431 million at an initial lease rate of 8.06%.

One percent annual fixed rent increases bring the effective rent yield to 8.66% over the 15-year initial term of the master lease. NHP will also receive CPI-based annual rent increases of up to 2% and revenue based rent equal to a specified percentage of Hearthstone's annual gross revenue.

The specified percentages start at 0.54% in the first year and increase to 2.63% during the initial term of the lease. At the beginning of the eighth year, the minimum rent is reset for the remainder of the initial term to the greater of fair market rent or 110% of the prior year's total rent.

NHP has agreed to finance $15 million of Hearthstone's future facility expansions at the lease rate then in effect, and Hearthstone has agreed to provide NHP with an exclusive acquisition right on its next $150 million of potential new investments, as well as a right of first offer/last look on an additional $150 million of potential new investments.

NHP is a real estate investment trust that invests in healthcare facilities and has investments in 482 facilities in 40 states.