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was a highly leveraged buyout, we believe that other factors
mitigated the high risks ordinarily associated with that
indebtedness. Most of the Hospitals had been owned and operated
by petitioners for several years prior to the Acquisition and,
therefore, they had an existing, experienced administrative
staff. Moreover, HealthTrust was headed by senior HCA Management
personnel who had extensive experience in the health care
industry and with HCA. HealthTrust Management, furthermore,
essentially began operating the HealthTrust organization during
May 1987. Except for the decline in operating results for April
and May 1987 (while rumors spread about the pending transaction),
the Hospitals' operating performance as a group exceeded the
projections used to determine the consideration for the
Acquisition.
Additionally, immediately after the Acquisition HealthTrust
held a commanding position in the health care industry. After
the Acquisition, HealthTrust became the second largest, after
HCA, hospital management company in the United States measured by
the number of domestic hospitals owned, and the fourth largest,
after HCA, Humana, Inc., and American Medical International,
Inc., measured by the number of domestic beds owned. The
Hospitals were comparatively modern facilities and initially
would not require extensive capital expenditures for
construction, modernization, or maintenance. A significant
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