Ontario, Calif.-based Prime Healthcare Services is buying Saint Clare's Health System of Denville, N.J., from Catholic Health Initiatives for $62 million, plus working capital, according to Fred Ortega, Prime's corporate director of government relations. The transaction was expected to close on July 31.
The health system's Saint Clare's Hospitals in New Jersey's Denville, Dover and Boonton Township and its health center in Sussex are included in the sale. The Franciscan Oaks retirement community in Denville is not part of the sale.
The Saint Clare's Health System in northern New Jersey has struggled financially in recent years. In an order issued in June by the Superior Court of New Jersey approving the sale, the court said that due to declining revenue from 2010 until the present, Saint Clare's Health System board of directors began exploring options, including the sale. The Saint Clare's Health System owed about $105 million to CHI as of June 30, 2014, according to the court.
Prime Healthcare said it will spend $30 million on capital improvements to Saint Clare's facilities over the next five years. Prime Healthcare is a for-profit company; the hospitals will become for-profit, but Prime has agreed to follow the Ethical and Religious Directives for Catholic Health Care Services in Saint Clare's facilities, as has been the case with Prime's previous purchases of Catholic health care facilities, Ortega explained. Prime has pledged to maintain charity care at or above the levels currently offered by Saint Clare's Health System.
The health system currently has about 2,500 employees, and Prime "has committed to hiring substantially all employees at Saint Clare's Health System hospitals," Ortega said.
Prime completed the purchase of St. Mary's Hospital in Passaic, N.J., last year. It has an asset purchase agreement for Livonia, Mich.-based Trinity Health's St. Michael's Medical Center in Newark, N.J., but is awaiting state approvals on that purchase. Prime says it looks forward to welcoming Saint Clare's hospitals into its growing network in New Jersey to leverage shared expertise, resources and economies of scale to provide quality, affordable health care.
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