Investment Firms to Acquire MedCath

MedCath Inc., an operator of cardiac hospitals, agreed to be acquired by New York-based investment firms Kohlberg Kravis Roberts & Co. and Welsh, Carson, Anderson & Stowe for about $440 million in cash and assumed debt. Holders of Charlotte, N.C.-based MedCath would receive $19 a share in cash, or about $240 million, and the investment firms would assume about $200 million in debt, said Josh Pekarsky, a spokesman for KKR. MedCath’s management team would remain, and MedCath would become a closely held company, allowing it to expand without focusing on shareholder expectations, analysts said. The acquisition, which comes less than a month after KKR pulled out of a potential investment in Oxford Health Plans Inc., is part of a larger interest in health care, KKR said. MedCath shares rose $1.63 to close at $18.13 on Nasdaq.