Caritas Christi closes sale to private equity firm
Caritas Christi Health Care, the state's second largest hospital chain, said this morning that it has closed its sale to an affiliate of Cerberus Capital Management, a New York private equity firm.As the chain's new owner, Steward Health Care System LLC, the Cerberus affiliate, could give Caritas the resources it needs to improve the quality and efficiency of its medical care, while also potentially attracting other for-profit companies to a state long dominated by nonprofit health care, analysts have said.
"The completed transaction brings approximately $895 million of capital to the Caritas Health Care System to be used for the assumption of pension obligations, repayment of debt, funding for operations, and significant capital projects, including immediate upgrades to Caritas’ six hospitals," the Caritas press release said.
Chief executive Ralph de la Torre and the current senior leadership at Caritas will remain in place, the release also said.
Caritas Christi, which became an independent nonprofit in 2008, was previously owned by the Roman Catholic Archdiocese of Boston.
The hospitals in the Caritas Christi chain are St. Elizabeth's Medical Center and Carney Hospital in Boston, Norwood Hospital, Good Samaritan Medical Center in Brockton, Saint Anne's Hospital in Fall River, and Holy Family Hospital in Methuen. The chain employs about 12,000 workers.
Caritas Christi disclosed in March that it had agreed to be acquired by Cerberus Capital Management in an $830 million deal. . The sale had already been approved by the Massachusetts Supreme Judicial Court, Attorney General and Department of Public Health, as well as the Roman Catholic Archdiocese of Boston and the Vatican, Caritas said. The system will continue to operate under the Caritas Christi banner following the sale.
In a statement, de la Torre said: "We owe a debt of gratitude to our employees, the communities Caritas Christi Health Care System serves, the Archdiocese of Boston and to the state of Massachusetts for their support and approval of this transaction. With the purchase of Caritas Christi, Steward Health Care System will become a model for high-quality, low-cost, community-based health care. We look forward to continuing our service to the communities that have put their trust in us.”
In a separate statement, W. Brett Ingersoll, director of Steward and co-head of private equity at Cerberus, said: “Cerberus is proud to be associated with Caritas Christi. Its health care model promises a bright future for the system. We look forward to working with Caritas’ outstanding management team to build a community-based health care model that will thrive for many years to come.”