IASIS Healthcare® LLC ("IASIS") today announced that it has entered into a definitive agreement to purchase a 78.2% interest in St. Joseph Medical Center, a 792-bed facility in downtown Houston, Texas.
St. Joseph Medical Center provides a full range of general, acute care medical and surgical inpatient and outpatient services including cardiology and cardiovascular surgery, cancer, intensive/critical care, emergency, neurosurgery, imaging, orthopedics, neonatal intensive care and a full-service women's program as well as sub-acute services such as psychiatric and rehabilitation units.
The hospital's current majority owner initiated the sale of its interest in the hospital as part of its Chapter 7 bankruptcy process. The hospital itself is profitable and is not a party to the majority owner's bankruptcy filing. As part of the bankruptcy process, Bankruptcy Trustee Alfred T. Giuliano has selected IASIS Healthcare as the contracting party for purchase of a majority interest in the hospital. The hospital's minority partners have approved IASIS as their new majority partner. The proposed sale transaction will take place pursuant to a court-directed auction process.
"Thanks to the hard work and dedication of our highly skilled medical staff and compassionate employees, St. Joseph continues to be recognized as a quality hospital serving the Greater Houston region," said Dr. John Bertini, a prominent Houston-area urologist and St. Joseph Medical Center Chairman of the Board. "Keeping our mission of service in the forefront, we approached this process as an opportunity to find a new majority owner and capital partner that not only shares our commitment to providing high-quality patient care, but also has the vision and ability to help St. Joseph achieve a new level of operational excellence."
St. Joseph Medical Center opened its doors on June 1, 1887, and became Houston's first hospital. Positioned on eight city blocks at the edge of Houston's revitalized downtown, St. Joseph was the first hospital to provide emergency, imaging and maternity services to what is now the fourth largest city in the nation. Known as "Houston's Birthplace" for many native Texans, St. Joseph is also Houston's first teaching hospital, currently providing residency programs and teaching opportunities for six medical schools.
Per the agreement, a group of independent investors, most of whom are physicians on the medical staff of St. Joseph Medical Center, will retain a 21.8% ownership interest in the hospital. Total annual net revenue for St. Joseph is approximately $245 million. The purchase price will be based upon an enterprise value of $165 million and is subject to customary closing adjustments. Pending the outcome of the bankruptcy sale process, regulatory approvals and customary closing conditions, the transaction is expected to close in IASIS' third fiscal quarter for 2011.
"As the first hospital in Houston, St. Joseph has the longest history and the most celebrated tradition of providing compassionate, high quality care to the residents of southeast Texas," said IASIS Healthcare President and Chief Executive Officer Carl Whitmer. "As part of our commitment to St. Joseph, its medical staff, employees and the growing community it serves, we will commit our proven operational strategies, advanced clinical information systems, comprehensive quality infrastructure and access to capital, all of which will help this great hospital continue to fulfill its 124-year-old mission. We are particularly excited about bringing our operational expertise to support the hospital's role as a prominent teaching hospital. St. Joseph's is the oldest teaching hospital in Houston and one of the oldest teaching hospitals in all of Texas. We look forward to honoring, supporting and expanding this important mission."
Whitmer added, "We are privileged to have been selected as the stalking horse in this sale process and look forward to the prospect of soon adding St. Joseph to our growing family of hospitals."
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