Caritas Christi Health Care has signed an agreement to be acquired by Steward Healthcare System, a newly formed affiliate of Cerberus Capital Management.
Under the terms of the acquisition, CCHC will continue to be managed by its current Massachusetts-based executive team, including president and chief executive Ralph de la Torre.
The agreement also stipulates that the six Caritas Christi hospitals will retain their Catholic identities and their existing policies on charitable and pastoral care, community benefits, and approach to labour relations from a social justice perspective.
The transaction is subject to customary closing conditions, including approvals from the Massachusetts Attorney General and the Massachusetts Department of Public Health, as well as the approval of the Archbishop of Boston.
The transaction will provide the Caritas healthcare system with approximately USD830m of capital support, including the assumption of all pension obligations for current and former Caritas employees, the repayment of virtually all of the system’s outstanding debt, a significant capital investment to fund operations, and a commitment to approximately USD400m of capital projects, including six major construction projects that will provide immediate upgrades to each of the Caritas Christi hospitals.
“Caritas Christi has a clear vision for the future of the system and is committed to offering world-class medical care and employment opportunities in the communities we serve. We are committed to creating an integrated community-based accountable care organisation,” says de la Torre. “We are striving to further improve the quality of care our patients receive, attract talented new physicians, upgrade and expand the infrastructure at our facilities, maintain or grow our staffing levels and undertake additional investments to further improve the quality of care we provide. In Cerberus, we found an investor that shares our vision and commitment.”
“Cerberus is pleased to be making a long-term investment that will help ensure the viability and future success of the Caritas Christi healthcare system,” adds W. Brett Ingersoll, co-head of private equity at Cerberus. “Caritas’ leadership and its 13,000 dedicated employees have done an outstanding job of stabilising operations over the past few years in a very challenging economic environment. Caritas is the region’s largest community hospital network, and our investment will give physicians, nurses and other health professionals the additional tools they need to deliver world-class care to patients in the communities where they live.”
