Private-equity firm Cerberus Capital Management, New York, has agreed to acquire Caritas Christi Health Care, Boston, for $830 million, including the Catholic system’s pension liabilities and virtually all of its debt.
The deal closes the struggling health system’s search for a buyer after the nation’s largest Catholic health system, 75-hospital Ascension Health, St. Louis, and six-hospital Caritas called off a tentative agreement in 2007.
Caritas Christi closed its books at the end of September with operating income of $54.3 million, including the $23.7 million sale of its medical laboratory subsidiary, on $1.32 billion in revenue after losing $20.5 million on $1.28 billion the prior year.
Under the agreement, Cerberus will repay nearly all of Caritas Christi’s outstanding debt, invest $400 million in major construction projects to upgrade each of the system’s hospitals, and make unspecified investment in operations, according to a written statement announcing the deal.
The deal must be approved by the Massachusetts Public Health Department, the state attorney general and the Archdiocese of Boston. Caritas Christi will continue to adhere to Catholic ethical and religious rules for medical care and follow church policies for free and discounted care and other subsidized services known as community benefits, pastoral care and labor relations, according to the statement.
Ralph de la Torre will remain president and CEO, and the system will retain its management and residency and teaching programs, according to the statement.About Cereberus Cerberus Capital Management, L.P., along with its affiliates, is one of the world’s leading private investment firms. Through its team of investment and operations professionals, Cerberus specializes in providing both financial resources and operational expertise to help transform undervalued companies into industry leaders for long-term success and value creation. Cerberus holds controlling or significant minority interests in companies around the world.Cerberus is headquartered in New York City with affiliate and/or advisory offices in the United States, Europe, the Middle East and Asia. About Caritas Established in 1985, Caritas Christi Health Care, New England’s largest community-based hospital network, is a comprehensive, integrated health care delivery network providing community-based medicine and tertiary care in eastern Massachusetts, southern New Hampshire and Rhode Island.Each hospital and facility within the Caritas family, while part of an extensive network of health care providers, has its own rich history of providing outstanding, compassionate care right in the communities where patients need it most. Caritas hospitals include: Carney Hospital in Dorchester, Good Samaritan Medical Center in Brockton, Holy Family Hospital in Methuen, Norwood Hospital in Norwood, Saint Anne’s Hospital in Fall River, and St. Elizabeth’s Medical Center in Brighton.
Other members of the Caritas family, who provide social, educational or health care services include: Caritas Home Care, Good Samaritan Hospice, Labouré College, and Por Cristo. In addition, the system includes Caritas Physician Network, a 400-physician group practice serving patients throughout the system.
Together, the more than 12,000 individuals that comprise the Caritas family, work each day to provide world class care, close to home, where patients need it most.