Philadelphia-based University of Pennsylvania Health System's proposed acquisition of Doylestown (Pa.) Health is expected to be credit positive for Doylestown and credit neutral for UPHS, according to Moody's.
The organizations signed a definitive agreement on Aug. 14 for Doylestown to become part of Penn Medicine. The deal is expected to close in early 2025.
Doylestown Health generates about $416 million in annual revenue compared to UPHS' $10 billion, according to an Aug. 23 report from Moody's. Assuming successful integration, Moody's said Doylestown's financial performance should improve as it "takes advantage of UPHS' large economies of scale to manage expenses and targeted clinical investments to increase market share and patient volume."
UPHS would benefit from the acquisition through an increased presence in Bucks County, Pa., building on current collaborations between the two organizations and gaining the opportunity for additional referrals to its flagship campus for more complex care, according to the report.
Moody's noted that UPHS has successfully integrated other hospitals outside its Philadelphia market over the past decade. It most recently integrated Plainsboro, N.J.-based Princeton HealthCare System in 2018.