Mergers & Acquisitions
Saint Peter's has been seeking a partner to allow it to maintain its Catholic mission and identity in a changing and competitive healthcare market.
The new name and branding strategy are meant to evoke the regular rising and falling of the tides, suggesting dependability.
Even with smaller systems flooding the market, analysts warn that the financial pressures caused by COVID-19 will result in fewer potential buyers.
Prime was chosen for its financial commitment and a history of turning around financially distressed hospitals.
There would be no cash involved in the transaction, with combined reserves and assets allowing more funds for new projects.
The drop in activity is especially pronounced year-over-year, with long-term care and physician medical groups among the hardest hit.
The transaction would reduce hospital competition in central Pennsylvania, Department of Justice says.
Data from S&P Global Market Intelligence shows a decline in M&A value in Q2, which can be attributed to the pandemic.
The anticipated reduction in health plan startup costs should allow Molina to recover the purchase price in about a year.
Prime will acquire St. Francis for a net of $350 million, with a $200 million base cash price and $60 million for accounts receivable.