Prime Healthcare and Verity Health System announced that the U.S. Bankruptcy Court for the Central District of California in Los Angeles has approved the Asset Purchase Agreement for the sale of St. Francis Medical Center (“St. Francis”) in Lynwood, California. Under the agreement, Prime will acquire St. Francis for a net consideration of over $350 million, including a $200 million ($200,000,000) base price and $15 million in payroll and benefits for staff.
Prime has committed to investing $47 million in St. Francis to fund capital improvements, including substantial technology investments and system upgrades, in addition to agreeing to make offers of employment to substantially all St. Francis employees. The sale is being conducted through a court-supervised process under Section 363 of the Bankruptcy Code and is subject to regulatory review, in addition to other closing conditions. Prime has agreed to honor the Attorney General and Bankruptcy Court conditions recently issued for this sale and preserve the hospital, trauma care, service lines, charity commitments, and community benefit programs.
“St. Francis Medical Center plays a crucial role in providing high-quality care for patients in Lynwood and the surrounding communities,” said Rich Adcock, CEO of Verity Health. “Prime has time and time again saved hospitals to support communities. We are confident that Prime will continue this record of excellence and look forward to working in partnership through the sale close process.”
“Our agreement with Verity reflects our decades-long mission of saving, improving and investing in community hospitals,” said Dr. Sunny Bhatia, Prime Healthcare’s Region I CEO and Corporate Chief Medical Officer. “We are honored and look forward to continuing St. Francis’ legacy of compassionate, critical medical care for the communities it serves, especially during this unprecedented health crisis.”
St. Francis Medical Center remains fully operational during the sale close process and Prime Healthcare will be supporting the hospital staff as they continue to provide critical care during this COVID pandemic.