Press Release

Community Health Systems, Inc. Turns to Kirkland & Ellis LLP in Mega Deal

Kirkland & Ellis LLP is advising Community Health Systems, Inc. (NYSE: CYH) in its multibillion-dollar acquisition of Triad Hospitals, Inc. (NYSE: TRI) that was announced today.

CHS and Triad entered into a definitive merger agreement pursuant to which CHS will acquire Triad for $54 per share in cash, or approximately $6.8 billion, including $1.7 billion of existing indebtedness. The merger will create the largest publicly traded hospital company in the United States. The combined company would own or operate approximately 130 hospitals in 28 states, with a total bed count of more than 18,700.

Triad has terminated its previous merger agreement with a group led by affiliates of CCMP Capital Advisors and GS Capital Partners. In accordance with the terms of the original merger agreement, Triad paid a termination fee to the original purchaser under such agreement. A Wall Street Journal article today reported about this aspect of the transaction:

"The deal marks a rare use of what is known as a go-shop provision, often used in private-equity deals to solicit a higher bidder after a prenegotiated transaction.

The move signals a new aggressiveness by Community, which has shied from large-scale merger activity during the past decade. Also, it is one of few times in recent years when so-called strategic buyers took the initiative away from private-equity funds, which have often enjoyed a lower cost of capital than corporate acquirers."

Kirkland advised CHS in negotiating more than $10 billion of debt financing in connection with the acquisition. The proceeds of the new financing will completely refinance the balance sheets of both CHS and Triad, adding to the complexity of the transaction.

Kirkland New York partner Stephen Fraidin is leading the deal team for CHS. The Kirkland team also includes partners Kirk Radke, Ashley Gregory, Heidi Bioski, Mark Kovner, Marimichael Skubel, Yosef Riemer and Josh Korff.

Kirkland & Ellis LLP is a 1,300-attorney law firm representing global clients in complex corporate, restructuring, tax, litigation, dispute resolution and arbitration, and intellectual property and technology matters. The Firm has offices in New York, Chicago, Hong Kong, London, Los Angeles, Munich, San Francisco and Washington, D.C.