St. Louis-based Ascension Health Care Network is in exclusive negotiations to acquire Hartford, Conn.-based Saint Francis Care, a stand-alone Catholic system that includes a 617-bed teaching hospital, a rehabilitation hospital, joint replacement institute, heart institute, cancer center and multiple sclerosis center.
Ascension Health Care Network and Saint Francis have signed a letter of intent and are working towards a definitive agreement. A Saint Francis spokeswoman said the organizations could complete necessary Vatican and regulatory reviews before the end of the year. As Catholic Health World went to press, the organizations were not disclosing details of the potential deal, including the estimated purchase price for Saint Francis, which currently is a health care ministry of the Archdiocese of Hartford.
Ascension Health Care Network is the for-profit Catholic health care system formed two years ago through a partnership between Ascension Health and the private equity firm Oak Hill Capital Partners. Its plan is to acquire equity-starved, nonprofit Catholic entities, convert them to for-profit organizations and help them achieve financial stability while maintaining their Catholic identity. If the Saint Francis acquisition is completed, it would be the first for Ascension Health Care Network.
Last year Ascension Health Care Network was in separate talks to acquire St. Joseph's Healthcare System in Paterson, St. Mary's Hospital in Passaic and Saint Clare's Health System in Denville, all in New Jersey. Ascension Health Care Network had hoped to build a statewide network in New Jersey, but all of those negotiations ended without any deals. St. Mary's has signed an agreement to be acquired by Prime Healthcare Services; Saint Clare's is in discussions with the not-for-profit Atlantic Health System and others.
In announcing their exclusive negotiations, Ascension Health Care Network and Saint Francis said their plan is to build a "statewide, clinically integrated health care delivery system" in Connecticut, although they did not elaborate on how they would achieve this.
In addition to Saint Francis there are three other Catholic hospitals in Connecticut: the Hospital of Saint Raphael in New Haven, which is part of Yale-New Haven Hospital; Saint Mary's Hospital of Waterbury; and St. Vincent's Health Services of Bridgeport, which is part of Ascension Health, a hospital group owned by Ascension Health Alliance. The alliance also is the parent of Ascension Health Care Network. Saint Mary's Hospital had been in negotiations to enter a joint venture with LHP Hospital Group, an equity and management company, but those negotiations ended last year.
Clarification (Published March 1, 2013)
In a Feb. 15 article on Ascension Health Care Network's talks to acquire Hartford, Conn.'s Saint Francis Care, Catholic Health World reported that the for-profit company's acquisition strategy is to acquire equity-starved Catholic entities.
To clarify, while some potential acquisitions may be distressed organizations, most will not, according to Leo Brideau, president and chief executive of Ascension Health Care Network. He said that while most potential acquisitions — Saint Francis Care included — will be financially stable enough to operate as stand-alone facilities or small systems, they may not have the capital necessary to achieve the scale and scope required to excel in the post-health care reform environment. Joining Ascension Health Care Network would help give them access to the capital needed to adjust to this environment, Brideau said.
Copyright © 2013 by the Catholic Health Association of the United States
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