After nearly a year of discussions, the hospital division of Burbank, Calif.-based UniHealth agreed late last week to merge with San Francisco-based Catholic Healthcare West.
The deal will give not-for-profit CHW 45 hospitals in California, along with the clout it had been lacking in the greater Los Angeles market. CHW will now operate 10 facilities in and around Los Angeles, compared with four before the deal. CHW will also surpass Tenet Healthcare Corp. as the largest hospital operator in the state. Overall, CHW operates 47 hospitals, including single properties in Nevada and Arizona.
UniHealth's holdings include eight Los Angeles-area hospitals: 309-bed California Hospital Medical Center, 275-bed Glendale Memorial Hospital and Health Center, 139-bed La Palma Intercommunity Hospital, 278-bed Long Beach Community Medical Center, 205-bed Martin Luther Hospital in Anaheim, 404-bed Northridge Hospital Medical Center-Roscoe Boulevard Campus and 211-bed Sherman Way Campus, and 273-bed San Gabriel Valley Medical Center.
Most of UniHealth's hospital employees will move to CHW, according to James Yoshioka, president of UniHealth's medical centers division.
CHW and UniHealth began discussions late last year, spurred on by the fact that UniHealth's facilities were more than $330 million in debt (Dec. 8, 1997, p. 3).
Terms were not disclosed. CHW and UniHealth said the deal is expected to close by year-end. Antitrust waivers have already been received from federal regulators, according to CHW spokeswoman Joyce Hawthorne. The California attorney general's office must approve UniHealth's plan to designate proceeds from the deal for charitable purposes.
The deal does not include UniHealth's UniMed Management Co., which includes 10 medical groups operating statewide. UniHealth has been attempting to find a buyer or capital partner for UniMed for more than a year.
"The eventual goal is to create a large charitable trust," Yoshioka said, although he did not link creation of the trust to UniMed's sale.