Nashville-based hospital operator, HCA, has signed a non-binding memorandum of understanding with the Colorado Health Foundation to purchase for $1.45 billion the foundation’s 40 percent stake in HCA-HealthONE in Denver.
HCA-HealthONE, created as a joint venture between the foundation and HCA in 1995, is the largest healthcare system in the Denver area, with seven hospitals, 13 ambulatory surgery centers, more than 30 occupational medicine/rehabilitation, specialty, and outpatient diagnostic imaging clinics and AirLife Denver, which provides critical care air and ground transportation for an eight-state region. The system has 8,700 employees and 3,000 affiliated physicians.
“We are very pleased with the opportunity to acquire full ownership of these outstanding facilities,” said HCA chairman and CEO Richard M. Bracken in a press release. HCA plans on funding the purchase price through amounts available under its revolving credit facility and does not anticipate it will have a material impact to its leverage ratio. “This transaction would not only expand our economic involvement in the metropolitan Denver market,” Bracken added, “but would also provide additional resources for the foundation to further its mission and outreach activities.”
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In the Colorado Health Foundation’s press release about the sale, the nonprofit said sale proceeds will be used to continue the foundation’s core mission of “making Colorado the healthiest state in the nation by increasing access to quality health care and coverage and encouraging healthy living.” The release states that upon the closing of the sale, the foundation will become the largest funded foundation in Colorado, with assets of more than $2 billion.
"By diversifying our funding, we can help ensure a strong future for the foundation with confidence in our ongoing ability to provide millions of dollars in health-related grants to the people of Colorado for generations to come,” said the foundation’s president and CEO, Anne Warhover, in a statement. “Through this transaction, the Foundation can focus on what it does best – increase the number of Coloradans with health insurance, ensure they have access to quality, coordinated care, and encourage healthy living."
Terms of the agreement include the establishment of an independent community board of trustees to provide community perspective and advice in connection with the operation of the HealthONE system and continuation of HealthONE's commitment to indigent care and Graduate Medical Education residency programs.
The proposed sale is pending regulatory review and the negotiation of a definitive agreement. The transaction is expected to close the second half of this year.