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Northstar Healthcare Acquiring Interests in Houston Hospital and ASC

HOUSTON, TX -- (Marketwired) -- 09/03/14 -- Northstar Healthcare Inc. (TSX: NHC) today announced that it has reached an agreement with First Surgical Partners Holdings, Inc. ("First Surgical") to form a new entity to own and operate the Houston, Texas hospital and surgical center businesses owned by First Surgical.

Under the Agreement, Northstar and First Surgical will form a new limited liability company to assume the operations of First Street Hospital and First Street Surgical Center. The new entity will be owned 51% by Northstar and 49% by First Surgical. Northstar will manage the operations of the hospital and surgical center under a management agreement. Northstar will contribute $7.5 million to the new entity which will be raised by an anticipated brokered private placement. Closing of the transaction is conditional on the successful completion of the private placement and other customary conditions.

"This transaction with First Surgical will be transformative to Northstar," said Dr. Donald Kramer, Chief Executive Officer of Northstar. "In the past year, Northstar has developed MRI centers, urgent care facilities, an Arizona surgical center, a network of primary care physicians and very strong patient recruitment programs. First Surgical is regarded in Houston as having the finest facilities with the most prestigious physicians. First Surgical's inclusion into Northstar's developing healthcare system will now allow for substantial revenues from patients who require more complex surgery than can be done on an outpatient basis."

Dr. Jacob Varon, Chairman of First Surgical stated that: "Northstar's reputation as an innovative revenue producing partner through marketing efforts is a perfect fit for First Surgical."

"These facilities will help Northstar diversify and expand our revenue streams," said Harry Fleming, President of Northstar. "This transaction is in line with our efforts to create unique revenue generation platforms in the healthcare industry. We are extremely confident that we can materially affect First Surgical's $28 million revenue stream with the Northstar model."

About Northstar Healthcare Inc.

Northstar owns and manages seven healthcare facilities in Texas and Arizona; four ambulatory surgery centers, two MRI centers and an urgent care center. The four ambulatory surgery centers are located in Houston (two), Dallas and Scottsdale, Arizona.

Forward-looking statements

This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to business of Northstar Healthcare Inc. (the "Company") and the environment in which it operates. Forward-looking statements are identified by words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" and other similar expressions. These statements are based on the Company's expectations, estimates, forecasts and projections. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. These risks and uncertainties are discussed in the Company's regulatory filings available on the Company's web site at www.Northstar-Healthcare.com or at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances.

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