Medical Facilities Completes IPS Offering

Medical Facilities Corp. completed, on March 29, 2004, an initial public offering of 22,173,212 income participating securities (IPS) for gross proceeds of $221,732,120. Each IPS consists of a common share and a subordinated note. Medical Facilities used the proceeds of the offering to indirectly acquire a 51 per cent interest in Sioux Falls Surgical Center, LLP, Black Hills Surgery Center, LLP and Dakota Plains Surgical Center, LLP (MFC partnerships), which own and operate three of the largest specialty hospitals in South Dakota. The IPS structure is designed for Canadian investors and is part of the income fund sector.

The offering was underwritten by a syndicate of underwriters led by BMO Nesbitt Burns Inc. and TD Securities Inc., and included RBC Dominion Securities Inc., National Bank Financial and Canaccord Capital Corp.

Medical Facilities and its subsidiaries were represented by Goodmans LLP, with a team that included Stephen Pincus, Neill May, Seymour Temkin, Grant McGlaughlin, Piran Thillainathan and Cristina Alaimo (corporate/securities) and Jon Northup and Sam Tyler (tax). Goodmans was assisted, in developing the IPS structure, by Goodwin Procter LLP in Boston, with a team that included William Whitledge and Brett Goldberg (tax) and Laura Hodges Taylor and Andrew Boyd (corporate).

The Black Hills Surgery Center was represented by Joseph Lux and Jess Pekarski of Costello Porter Hill Heisterkamp Bushnell & Carpenter LLP in Rapid City, South Dakota; and by Margaret McNee (corporate/securities) and Todd Miller (tax) of McMillan Binch LLP. The Sioux Falls Surgical Center was represented by Russell Greenfield and Sherri Rotert of Boyce, Greenfield, Pashby & Welk LLP in Sioux Falls, South Dakota. Jay Christiansen of Faegre & Benson LLP was US regulatory health counsel to the MFC partnerships.

The underwriters were represented by Borden Ladner Gervais LLP, with a team that included Bill Sirett, Gordon Raman, Warren Learmonth, Barbara Smith, Dario Fracca, Dyana McLellan, Jamie Afifi and Julie Mansi (corporate/securities) and Robert Kopstein and Bruce Sinclair (tax); and in the US by Paul, Weiss, Rifkind, Wharton & Garrison LLP, with a team that included Edwin Maynard and Andrew Foley (corporate/securities) and Richard Bronstein, Eric Goodison and Matias Milet (US federal income tax).