Boston-based Steward Health Care has signed a definitive agreement to acquire Franklin, Tenn.-based IASIS Healthcare.
The Wall Street Journal reported the transaction is for $1.9 billion. Becker's has reached out to Steward to verify the value of the deal and the article will be updated accordingly.
Under the deal, Steward will become the largest private for-profit hospital operator in the U.S. with 36 hospitals across 10 states, managed care operations in Arizona, Utah and Massachusetts and projected revenues of nearly $8 billion in 2018, the first year of consolidated operations. The transaction, which is subject to regulatory approvals and customary closing conditions, is expected to close in the third calendar quarter of 2017, according to a news release on Steward's website.
Currently, Steward operates 18 hospitals and directly employs more than 1,300 multispecialty physicians in facilities across Massachusetts, Ohio, Florida and Pennsylvania. IASIS operates 17 hospitals and one behavioral health hospital across Utah, Arizona, Colorado, Texas, Arkansas and Louisiana.
The deal will transfer operations of IASIS Healthcare's 18 hospitals, which encompass nearly 7,500 patient beds and approximately 38,000 employees — including more than 1,800 directly employed multispecialty physicians and several thousands aligned physicians — to Steward Health Care. Steward will also assume operations of IASIS' 140 outpatient facilities across Arizona, Arkansas, Colorado, Louisiana, Texas and Utah, according to The Wall Street Journal.
Steward Health Care is backed by private-equity firm Ceberus Capital Management LP and real estate investment trust Medical Properties Trust. Under the deal, Medical Properties Trust has agreed to acquire the interests of substantially all of IASIS' hospital real estate subject to long-term leases and loans with Steward, according to the news release from Steward. The terms of the agreement specify that cash proceeds paid by MPT and other financing sources will be used to retire IASIS' senior secured term loans and unsecured notes. Remaining cash proceeds will be paid to IASIS equity holders, including its majority stockholder, TPG Capital.
This deal marks the latest in a series of acquisitions for Steward, which in May closed a deal to acquire eight hospitals from Franklin, Tenn.-based Community Health Systems.