Stafford Springs, Conn.-based Johnson Memorial Medical Center announced approval of an asset purchase agreement with Hartford, Conn.-based Saint Francis Care.
Johnson Memorial Medical Center is seeking Chapter 11 bankruptcy in the deal, under which Johnson Memorial Medical Center would become a wholly-owned subsidiary of Saint Francis Care.
"After discussions among (Johnson Memorial Medical Center's) board of directors, lenders, governmental agencies and multiple advisors, a pre-planned and voluntary reorganization under a Chapter 11 bankruptcy filing was collectively determined as the most efficient and expedient process to proceed with the business transaction under the terms negotiated, which includes a debt restructuring," Johnson Memorial Medical Center said in a prepared statement.
Specific terms of the deal were not addressed in a joint news release. However, the release does say the terms "will allow (Johnson Memorial Medical Center) to emerge from this process with less debt" and that "the deepened relationship with Saint Francis Carewill help to achieve the goal of becoming a stronger, more financially sound hospital, well-positioned for the future."
The agreement still requires regulatory approval.
Johnson Memorial Medical Center and Saint Francis Care already have an affiliation agreement, which both sides signed in July 2012.
Johnson Memorial Medical Center serves as the parent organization of Stafford Springs-based Johnson Memorial Hospital, Evergreen Health Care Center in Stafford Springs; Home & Community Health Services in Enfield, Conn.; and Johnson Health Care in Enfield, while Saint Francis Care serves as the parent company of Saint Francis Hospital and Medical Center in Hartford, as well as Mount Sinai Rehabilitation Hospital in Hartford and its other providers, according to a news release.
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