St. Francis Hospital & Health Center was preparing to close its doors, until MSMC Investors LLC stepped forward with a proposition to acquire the hospital.
SSM Health Care, which owns and operates the 410-bed, Catholic, voluntary, not-for-profit healthcare institution, signed a deal with MSMC to transfer ownership within 60 to 90 days.
The transfer ensures that the hospital will remain open and continue to serve the city of Blue Island, Ill. and surrounding communities.
MSMC stands for MetroSouth Medical Center, which will be the new name of the for-profit hospital.
MSMC Investors was created by Transition Healthcare Company and its financial backer, Falcon Investors, as the holding company for the hospital and related healthcare assets.
Transition and Falcon provide hospital turnaround and management expertise, financial resources and financial market experience to hospitals that are financially distressed.
Falcon Investors is the majority owner of MSMC Investors, and Transition holds a minority interest and will be responsible for managing the hospital on a day-to-day basis.
Arnold Kimmel, CEO of Transition Healthcare, will become CEO of MetroSouth Medical Center.
"We know how important it is to residents of Blue Island and the surrounding communities to keep the hospital operating for the long term and we intend to do just that," he said.
SSM officials said in early April that they would close the hospital if efforts to find a buyer were unsuccessful.
The transaction received support at every level of government, including the state senate and Blue Island's mayor and city council, which passed resolutions in support of the sale and of financial incentives for the redevelopment and continued operation of the hospital.
"We are very pleased that we have reached an agreement with MSMC Investors LLC and Transition Health Care that will allow this beautiful hospital to remain open - for the people of the community that SSM has served for more than a century, and for the employees and physicians who work here," said Sister Mary Jean Ryan, president and chief executive officer, of SSM Health Care, a St. Louis-based Catholic healthcare system.
Both parties said the terms of the agreement were confidential. Lawrence Krule, the executive vice president of Falcon who will become chief restructuring officer of MetroSouth, said MSMC Investors and its affiliates will be investing approximately $30 million in new hospital equipment, such as a 64-slice CT Scanner, a PACS imaging system, a new mammography unit and upgrades to patient rooms, as well as investing additional working capital.
"This significant level of investment reflects our hope and aspiration for what we can achieve in the turnaround of the hospital for the communities it serves and for the employees," Krule added.