Ontario, Calif.-based Prime Healthcare Services has completed its acquisition of St. Mary's Hospital in Passaic, N.J.
Prime has agreed to invest more than $80 million into the hospital, including $30 million for capital improvements. Additionally, Prime will maintain St. Mary's as a 269-bed acute-care facility, maintain charity care levels, hire all existing employees and retain the hospital's physician base. Prime has also agreed to honor the Catholic ethical and religious directives and honor the hospital's existing collective bargaining agreement with JNESO, a labor union that represents healthcare workers in New Jersey and Pennsylvania.
"This is a special day for St. Mary's Hospital, and its patients and employees," said Edward J. Condit, president and CEO of St. Mary's. "Prime Healthcare is patient focused and quality driven and will strengthen St. Mary's financially so that it can dedicate more of its resources to providing even better community care."
New Jersey Superior Court Judge Margaret Mary McVeigh approved the sale last month. New Jersey Health Commissioner Mary E. O'Dowd and Attorney General John J. Hoffman approved the sale of St. Mary's in June. In February, the New Jersey Department of Health recommended that Commissioner O'Dowd approve the sale of the hospital to Prime. After reviewing the proposed transaction, health department staff concluded the sale is crucial to the hospital's survival. St. Mary's has been struggling financially for a number of years and has received $34.3 million in stabilization grants from the New Jersey Health Department and $5.6 million from the New Jersey Department of Treasury to cover debt service payments since 2009. As of February, the hospital had about $39 million in long-term outstanding debt and $5.1 million in a working capital line of credit.
The hospital signed a letter of intent to sell to private, for-profit Prime in November 2012 and finalized a binding asset purchase agreement in January 2013.