Chesterfield, Mo.-based Mercy has signed a nonbinding letter of intent with Englewood, Colo.-based Catholic Health Initiatives to transfer ownership of Mercy Hospital Hot Springs (Ark.).
Under the deal, CHI would acquire Mercy Hot Springs, a 282-bed hospital that includes an 80-physician clinic, and it would become an affiliate of CHI's St. Vincent Health System in Little Rock, Ark. Financial terms of the deal were not disclosed.
St. Vincent plans on preserving all existing physician relationships in the Hot Springs community, and officials also said they are "committed to creating a strong and integrated regional physician network."
Whispers of a potential Mercy-CHI deal bubbled to the surface in September. The potential transaction comes as both Mercy Hot Springs and St. Vincent failed in separate transactions earlier this year. In June, Mercy and Franklin, Tenn.-based Capella Healthcare discontinued their negotiations to join their respective hospitals in Hot Springs due to issues with both the Vatican and the Federal Trade Commission. In July, St. Vincent and University of Arkansas for Medical Sciences in Little Rock ditched their potential merger after due diligence revealed neither system could "define a pathway that meets the goals of both institutions."
Mercy and CHI officials are working toward a definitive agreement and expect the deal to close by Dec. 31. The transaction must also receive approval from both organizations' boards, as well as state, federal and Catholic authorities. Bishop Anthony Taylor of the Diocese of Little Rock has already considered the transaction "welcome news," according to a news release.
Mercy is currently the sixth-largest Catholic health system in the United States with 32 hospitals. CHI is the third-largest Catholic system with 87 hospitals. Mercy Hot Springs would be the fourth hospital within St. Vincent.
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