Doctors back off plans to purchase BJC

Representatives of both sides confirmed that the nonbinding letter of intent between the Commerce medical facility and Doctors Hospital of Georgia was withdrawn.

Finances appeared to be at the root of the setback.

“Some of the language in the letter required them to show proof of the ability to finance and the availability of funds,” explained BJC CEO Jim Yarborough. “There was a window of opportunity the needed to show proof. They were not able to meet that requirement within the deadline.”

Doctors Hospital of Georgia is an investment group that hoped to acquire BJC Hospital and build a new version at the Maysville Road medical complex being developed by Atlanta podiatrist Dr. James Bouchard. Bouchard is not a part of Doctors Hospital, but he had offered to donate land for a hospital at the site.

Yarborough thinks the would-be buyers ran into the credit crunch.

“As we all know, (lending institutions) have a tight hold on funds,” he commented. “I think they (Doctors Hospital) found out the hard way how tight that hold is.”

The withdrawal of the letter of intent does not necessarily rule out some future agreement, but it indicates the difficulties caused by an economy in recession.

First, the economy has hit BJC Medical Center hard. Its bad debt and uncompensated care have put operations deep into the red. Secondly, a tighter credit market makes it more difficult for groups like Doctors Hospital to borrow money.

According to Yarborough, the medical center had provided a lot of its current financial data to the potential investors, who he speculates took it to their potential lenders.

“I think that might have been an issue for them. Our year-to-date financials are not real strong,” Yarborough stated.

While that could possibly be resolved, BJC opted out of the letter of intent so it can listen to any other offers that might arise. As long as the letter was in effect, Yarborough said, BJC could not field other offers.

“This opens the door so we can talk to other entities,” he said.

There have been other interested parties, but BJC officials know that the economic times will make it difficult to consummate an acquisition.

“We have had some big players, where I think corporate put the skids on the process,” Yarborough said. “The board knows this is probably the worst time to try to do what we want to accomplish.”
Former BJC chief financial officer Bill Williams is the project manager for EDT, Inc., on behalf of Doctors Hospital of Georgia, Inc. He agreed that the issue is not dead and that Doctors Hospital would still be interested “if the hospital came back with new negotiations or new numbers or something of that nature.”