Dallas-based Steward Health Care and Orlando (Fla.) Health have entered into a binding asset purchase agreement for Steward's northern Florida assets for $439.42 million in cash, according to Aug. 14 bankruptcy court documents obtained by Becker's.
The assets part of the agreement include: Rockledge (Fla.) Regional Medical Center, Melbourne (Fla.) Regional Medical Center, Sebastian (Fla.) River Medical Center and some of Steward Medical Group's practices in Northern Florida, as reported in an Aug. 14 Steward news release.
Orlando Health's qualified bid is designated as a stalking horse bid, meaning the system's bid could be subject to "higher or better qualified bids received by Aug. 26" when a bankruptcy court-approved auction could take place.
The transaction, which is contingent upon certain closing conditions and regulatory approval from the bankruptcy court, is expected to be complete by the fourth quarter of 2024 should Orlando Health be the winning buyer in the auction.
"We look forward to reviewing any additional bids that are received between now and August 26, and are encouraged by Orlando Health’s vote of confidence in our northern Florida operations," the Steward release said.
Steward sought Chapter 11 protection May 6 and has been working to offload its hospitals and physician group, Stewardship Health.
Most recently, the for-profit health system entered into a definitive agreement to sell Stewardship Health to Nashville, Tenn.-based Rural Healthcare Group, part of private equity firm Kinderhook Industries, for $245 million in cash.
Orlando Health is a 3,487-bed system that comprises 17 hospitals, 10 freestanding emergency rooms and nine hospital care at-home programs.
"We have seen repeatedly that when Orlando Health enters a new area, patient care improves, relationships with physicians and team members grow stronger, and surrounding communities benefit." David Strong, president and CEO, Orlando Health, said in an Aug. 14 news release shared with Becker's. "We believe we can recreate these same results for patients, team members, physicians and the communities in which these hospitals are located."
News of Orlando Health's agreement with Steward comes as the health system shared plans in early August to acquire 70% of Dallas-based Tenet Healthcare's interest in Birmingham, Ala.-based Brookwood Baptist Health.
The transaction would include five hospitals along with affiliated physician practices and related operations.
Editor's note: This story has been updated as of Aug. 15 at 8:42 a.m. CT.