Daugh­ters of Char­ity sys­tem fi­nally closes on a deal

Modern Healthcare - - REGIONAL NEWS - —Me­lanie Evans

Daugh­ters of Char­ity Health Sys­tem’s long, fraught search for a buyer has ended. Blue­Moun­tain Cap­i­tal Man­age­ment closed on a deal last week for the fail­ing six­hos­pi­tal sys­tem, now named Ver­ity Health Sys­tem.

Los Al­tos Hills, Calif.-based Daugh­ters of Char­ity fi­nal­ized the sale af­ter los­ing one po­ten­tial buyer and fail­ing to reach a deal with an­other.

Blue­Moun­tain, which will man­age the hos­pi­tals through its sub­sidiary In­tegrity Health­care, pledged up to $260 mil­lion to the fail­ing sys­tem as part of the deal.

“This large in­fu­sion of cap­i­tal will pro­vide a great jump-start on the many strate­gic, op­er­a­tional and cap­i­tal ini­tia­tives des­per­ately needed in our hos­pi­tals,” said Robert Is­sai, for­mer CEO of Daugh­ters of Char­ity.

The deal won con­di­tional ap­proval from Cal­i­for­nia’s at­tor­ney gen­eral, who asked that mul­ti­ple terms be met in or­der for the sale to close. Blue­Moun­tain agreed to main­tain the sys­tem’s es­sen­tial ser­vices for at least 10 years, a con­di­tion that was a deal-breaker for Prime Health­care Ser­vices, the first for-profit suitor that tried to buy Daugh­ters. Prime called off its $843 mil­lion bid for the hos­pi­tal this year af­ter the at­tor­ney gen­eral re­quired Prime to meet 300 con­di­tions to ac­quire Daugh­ters of Char­ity.

The sys­tem has searched for a buyer since 2012, when it en­tered into talks with the na­tion’s largest Catholic health sys­tem, As­cen­sion Heath, St. Louis. Those ten­ta­tive part­ners an­nounced in Jan­uary 2014 that talks had bro­ken off with­out a deal.

Daugh­ters of Char­ity has been

re­named Ver­ity Health Sys­tem.

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