Daughters of Charity system finally closes on a deal
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.