Los Altos, Calif.-based Daughters of Charity Health System has selected BlueMountain Capital Management, a private investment firm, to manage and operate the system's six hospitals and medical foundation.
Here are five things to know about the deal.
1. Through the transaction, BlueMountain will give DCHS access to more than $250 million in new capital. The funds will be used for a number of purposes, including investing in physical plant improvements and operations.
2. BlueMountain will sponsor Integrity Healthcare, an entity owned by BlueMountain, to manage and operate the hospitals and medical foundation.
3. Under the deal, DCHS and its hospitals will maintain their nonprofit status.
4. The transaction includes an option for BlueMountain to purchase the health system after three years.
5. "In evaluating candidates to manage the hospitals our priority was to seek the strongest bidder who would provide the greatest long-term financial stability while honoring the obligations to our associates, physicians, retirees and other constituents," said DCHS President and CEO Robert Issai, in a statement. "We are extremely excited by today's announcement."
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