United Surgical Partners Going Private in $1.8 billion Deal

United Surgical Partners International, Inc. announced today that it has signed an agreement to merge with UNCN Acquisition Corp., an affiliate of Welsh, Carson, Anderson & Stowe (Welsh Carson). Under the terms of the merger agreement, the holders of USPI common stock will receive $31.05 per share in cash for their shares, which represents a 13.4% premium above the January 5, 2007 closing price of $27.39, a 21.2% premium above the closing price of $25.62 on November 13, 2006 (the day prior to receipt of Welsh Carson’s initial offer) and a premium of 18.8% above the average closing price of the USPI shares for the last three months of $26.13. The transaction is valued at approximately $1.8 billion, including the assumption of certain debt obligations of USPI pursuant to the merger.

USPI’s Board of Directors approved the transaction following the unanimous recommendation of a Special Committee composed entirely of independent directors.

Commenting on the announcement, Mr. Donald E. Steen, Chairman of USPI, stated, “Our Special Committee and our Board believe that this transaction is in the best interests of our stockholders, while positioning the Company more favorably to respond to changing market conditions. USPI will continue its intense focus on providing high-quality health services in partnership with its physician and non-profit health system partners. In addition, we expect to continue to pursue growth opportunities as they arise. We do not expect the transaction to result in any changes in USPI’s management.”

“Welsh Carson was the founding stockholder of USPI,” said Scott Mackesy, a General Partner of Welsh Carson. “We are enthusiastic about working again with management and putting our extensive experience and resources to work in helping USPI pursue its strategic objectives.”

The closing of the transaction is subject to approval by USPI’s stockholders, requisite antitrust and other customary closing conditions. The transaction is expected to be completed in the second quarter of 2007, with the exact timing being dependent on the completion of SEC filings and clearance as well as other factors. The transaction is not subject to a financing condition.

The merger agreement allows USPI until February 17, 2007 (the “no shop period start date”) to actively solicit other possible bidders and, thereafter, subject to certain conditions, to respond to unsolicited inquiries by other persons interested in acquiring the Company. Should a superior offer be received and accepted, USPI may, subject to certain conditions (including payment of a termination fee), terminate the merger agreement with the Welsh Carson affiliates. In connection with such termination, the Company must pay a fee of $42.5 million to an affiliate of Welsh Carson, unless such termination is in connection with a proposal received prior to the no-shop period start date, in which case the Company must pay a fee of $14.7 million to such Welsh Carson affiliate.