Massachusetts Attorney General Martha Coakley has approved the sale of Boston-based non-profit Caritas Christi Health Care to private equity firm Cerberus Capital Management, saying the system could not continue to survive in its current form, according to a Boston Business Journal report.
The deal is one of a few recent high-profile transactions of non-profit systems by for-profit companies. For-profit companies traditionally have more capital for acquisitions. These deals, however, often require additional regulatory approval since the non-profit status of the entity would transfer to for-profit.
Attorney General Coakley ruled in favor of the deal after a five month review, but will require Cerberus to preserve the jobs and fully fund the pensions of current and former Caritas employees. In addition, Cerberus must commit no less than $400 million to capital improvements over four years as well as commit to keeping open all Caritas facilities for a period of five years, providing certain financial margins are met, according to the report.
The original deal, valued at $830 million, was announced in March.
Read the Boston Business Journal report on Caritas Christi.
Read more coverage on Caritas Christi:
- Boston's Caritas Christi to Close Two Hospitals if Cerberus Deal Fails
- Competitors of Caritas Christi Seek Strict Rules for the System Following Sale to For-Profit Firm
- Massachusetts Will Hold Hearings on Selling Caritas Christi to For-Profit Group
The deal is one of a few recent high-profile transactions of non-profit systems by for-profit companies. For-profit companies traditionally have more capital for acquisitions. These deals, however, often require additional regulatory approval since the non-profit status of the entity would transfer to for-profit.
Attorney General Coakley ruled in favor of the deal after a five month review, but will require Cerberus to preserve the jobs and fully fund the pensions of current and former Caritas employees. In addition, Cerberus must commit no less than $400 million to capital improvements over four years as well as commit to keeping open all Caritas facilities for a period of five years, providing certain financial margins are met, according to the report.
The original deal, valued at $830 million, was announced in March.
Read the Boston Business Journal report on Caritas Christi.
Read more coverage on Caritas Christi:
- Boston's Caritas Christi to Close Two Hospitals if Cerberus Deal Fails
- Competitors of Caritas Christi Seek Strict Rules for the System Following Sale to For-Profit Firm
- Massachusetts Will Hold Hearings on Selling Caritas Christi to For-Profit Group