Dallas-based Steward Health Care has entered into a definitive agreement to sell its physician group, Stewardship Health, to Nashville, Tenn.-based Rural Healthcare Group, part of private equity firm Kinderhook Industries, for $245 million in cash, according to an Aug. 12 bankruptcy court filing, obtained by Becker's.
The planned acquisition comes after UnitedHealth Group's Optum backed out of plans to acquire Stewardship Health in late June.
RGH, which comprises 17 clinics across the U.S., would take on Stewardship, which combines Steward Health Care Network and the Steward Medical Group primary care providers with an integrated primary care network of around 5,000 employed and affiliated providers in nine states. Stewardship's value-based care is offered to Medicaid and commercial populations, according to an Aug. 12 Steward news release.
"As part of the ongoing Chapter 11 proceedings, following a robust and active bidding process, Steward Health Care is pleased to have reached an agreement with Rural Healthcare Group," Mark Rich, president of Steward Health Care, said in the release.
Following the acquisition, RGH "plans to make significant investments Stewardship's infrastructure," according to an Aug. 12 RGH news release.
"RHG's partnership will help keep healthcare local for patients, allowing them to continue to see providers that are familiar with their medical history," the RGH release said. "Furthermore, the transaction will separate Steward Medical Group and Steward Health Care Network from Steward's hospital system - transitioning clinics from health system-owned to independent is an area of expertise for RHG, and ultimately a benefit to patients."
Steward sought Chapter 11 bankruptcy in May and is actively working to offload its hospitals.
The for-profit health system has also received bankruptcy court approval to close two of its Massachusetts hospitals, Boston-based Carney Hospital and Ayer-based Nashoba Valley Medical Center, by Aug. 31. A third Steward hospital, Holy Family Hospital in Haverhill (Mass.), is also facing closure due to an altered bid from a potential owner.
The Stewardship Health transaction must now wait for bankruptcy court approval and will close based on the completion of closing conditions, like regulatory approval, the releases said.