Columbia/HCA Healthcare Corp. will merge its Colorado facilities with Denver system HealthOne to become the state's largest acute-care provider.
The deal, a year in the making, is the ninth joint venture between Nashville, Tenn.-based Columbia and a not-for-profit provider.
Under the arrangement, each partner will own 50% of a new company and appoint half its 14-member board.
Terms weren't disclosed, but Health-One said it expects the system to retire its $360 million in debt with as much as $10 million left over for HealthOne's remaining not-for-profit foundation.
In its fiscal year ended Aug. 31, 1994, HealthOne reported assets of $650 million and operating profits of $16 million on net revenues of $500 million.
The combination of Columbia's and HealthOne's Denver-area holdings will give the joint venture control of one-third of the Denver acute-care market.
HealthOne owns three acute-care and three specialty hospitals in Denver. Columbia, meanwhile, operates three acute-care hospitals and a psychiatric facility in the Denver area.
HealthOne's flagship facility is 558-bed Presbyterian-St. Luke's Medical Center in Denver. Columbia's flagship in Denver is 255-bed Rose Medical Center, which the chain acquired last month for a reported $200 million.
Representatives of the two systems met with Federal Trade Commission officials late last week to discuss the deal. Pre-merger notification documents haven't been filed yet.
Columbia has wooed several hospitals in Denver, while HealthOne has sought ways to reduce its debt.
The memory of a troubled relationship with for-profit American Medical International slowed negotiations with Columbia, said Zane Todd, vice president of strategic development at HealthOne. The system's 1991 buy-out from AMI contributed to its high debt.