Uría & Menéndez y Allen & Overy advised on Euros 217 million MBO in Spain

Allen & Overy (Madrid) and Uría & Menéndez have advised on the disposal of a majority stake of United Surgical Partners International (USPI), a Spanish subsidiary of United Surgical Partners Europe. Mercapital, a leading Spanish private capital firm, has purchased USPI´s majority stake, in an MBO transaction valued at Euros 217 million and which is so far the largest MBO transaction in Spain in 2004.

United Surgical Partners Europe, S.L., the target company of the acquisition, is the European subsidiary of the US hospital group United Surgical Partners International, and is devoted to the management of well-known hospital centers, such as Instituto Dexeus (Barcelona), Clínica San Camilo (Madrid), Clínica Sagrado Corazón (Sevilla), Hospital San Carlos (Murcia) and Hospital de Marbella.

ING has made available 121,600,000 Euros with a Senior Credit Agreement in 5 tranches intended to (i) finance the acquisition of the company United Surgical Partners Europe, S.L., (ii) restructure the present borrowing of the group, (iii) provide the company with a working capital facility, (iv) provide the company with a facility for new investments (capex) and (v) provide the company with a facility for new acquisitions. The remaining amount of 20,000,000 Euros, was granted by AIG-MezzVest Luxembourg, S.à.r.l. with a Mezzanine Loan Agreement. It is envisaged that an entity of the ING group will also act as hedging entity. The relationship among creditors has been regulated in a complex Intercreditor Agreement. A complex security package containing first and second ranking security interests has also been designed and created to secure creditors? rights.

Uría & Menéndez has advised ING Bank N.V. and AIG-MezzVest Luxembourg, S.à.r.l. in the financing transaction with which 141,000,000 Euros have been made available to USPE Medical Investment, S.L. The lawyers from Uría who acted in the deal were Carlos de Cárdenas Smith (partner, Corporate, Madrid), Sebastián Sáenz de Santa María (senior associate, Corporate, Madrid), Gonzalo Martín de Nicolás (senior associate, Corporate, Madrid) and Ángel Pérez López (junior associate, Corporate, Madrid).

Allen & Overy, has advised United Surgical Partners International (USPI). The members of Allen & Overy Madrid who worked on this transaction were, among others, Fernando Torrente (corporate partner), Carlos Albiñana (tax partner), Jose A. Sánchez Dafos (corporate senior associate), Amelia Fontán (corporate associate), Magdalena Bertram (finance senior associate), Pedro Callol (antitrust senior associate) and Jorge Aranaz (EPI associate).

Commenting on the deal, Fernando Torrente said: "We are delighted to have assisted United Surgical Partners International on this important transaction which is clear evidence of its commitment to deliver on its strategy. This is a transforming transaction in the South European Health Private market as it represents the largest MBO of the year in Spain in the Private Equity Sector?.

Ashurst (advising Mercapital), and Linklaters, through partner Alejandro Ortiz and associates Ignacio Echenagusia and Carlos Echave (co-advising with Uría & Menéndez AIG-MezzVest Luxembourg, S.à.r.l. in the negotiation of the Intercreditor Agreement) also participated in the deal.

Commenting on the deal to Latin Counsel, Carlos de Cárdenas from Uría said: ?It has been a pleasure for Uría & Menéndez to advise ING Bank N.V. in this transaction which constitutes the largest MBO of the year in Spain and confirms ING´s deep expertise in this area. In our view, the innovative structure of this financing and, in particular, of its capex and acquisition facilities, will set a precedent for future transactions in the market.?

The deal was closed last September 9 in record time.

United Surgical Partners International, headquartered in Dallas, Texas, has ownership interests in or operates 79 surgical facilities in the United States, Spain and the United Kingdom. Of the Company's 67 domestic facilities, 39 are jointly owned with 20 not-for-profit healthcare systems. After the completion of the Chicago and Spain transactions, which are expected in the third quarter, the Company will have ownership interest in or operate 75 surgical facilities, including three facilities in the United Kingdom.