Providence, R.I.-based CharterCare Health Partners and Santa Ana, Calif.-based Prospect Medical Holdings have signed a definitive asset purchase agreement to form a joint venture.
CharterCare, a nonprofit that operates Roger Williams Medical Center in Providence and Our Lady of Fatima Hospital in North Providence, and the private, for-profit PMH signed a letter of intent in March. Under the joint venture, PMH will manage the hospitals and receive equal representation on the CharterCare's boards.
PMH also will invest $95 million into CharterCare over the next four years. Once the transaction receives regulatory approval, PMH will hand over $45 million for debt reduction and short-term working capital. The remaining $50 million will be allocated over the next four years to help with physician recruiting, facility improvements and technology upgrades.
The deal now moves to the Rhode Island Department of Health and Attorney General Peter Kilmartin for approval. Religious officials also must OK the deal.
PMH, supported by Los Angeles-based private equity firm Leonard Green & Partners, currently manages two health systems: Alta Hospitals System, a five-hospital system based in Los Angeles, and Nix Hospitals System, a one-hospital system based in San Antonio. In June, the company signed a nonbinding letter of intent to acquire two-hospital Raritan Bay Medical Center, based in Perth Amboy, N.J.
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