MAGNA Healthcare Group Inc.
Magna is a healthcare company created by the founders of PERE Capital Partners, Greg Lustig and Mario Gallo, both of whom have significant experience and expertise in business, private equity, and the capital markets to turn around and roll-up distressed hospitals with untapped growth potential in stable markets.
PERE feels the healthcare system is one of the most essential cornerstones of every modern society. It must be protected at all times to preserve the well-being and quality standards of living for our communities. Since the pandemic, 44% of all hospitals in the US have been operating at a loss with Hospital closures and bankruptcies becoming commonplace, with as many as 600 hospital closures in 2023 alone. If these distressed hospitals are allowed to close, competition will significantly decrease, resulting in skyrocketing prices for patients. It is for these reasons that PERE Capital Partners has created the Mangna Healthcare Group, which is committed to this cause while simultaneously producing healthy returns for their financial partners.
We will add value by successfully turning around these hospitals by establishing more efficient billing, coding, and collection procedures; renegotiating insurance carrier agreements; adding new specialty surgical procedures; updating medical equipment, testing, and medical devices; renovating and modernizing the facilities; adding telemedicine to hospitals; improving medical procedures and the professional staff. By centralizing services at the corporate level, economies of scale are realized.
Magna’s exit strategy is to sell the Company or its assets in five years to a large hospital network, PE Fund, strategic buyer or a family office from its extensive list of relationships with such buyers. Assuming we can complete our intended goal of purchasing 20 facilities at an average cost of $5 million during that period, once we have turned around these hospitals, they will be worth an average of $50-$60 million each. Over our five-year intended holding period, if our profitability reaches even 7%, which is the lowest profitability margin for hospitals today, our portfolio should be worth at least $1.96 billion without taking into account revenue growth.
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