After getting off to a slow start, Nashville-based Vanguard Health Systems is picking up its acquisition pace.
Until last month, the 2-year-old for-profit hospital company could only boast of one hospital holding in Phoenix and a string of failed transactions. But two separate deals in the past six weeks have boosted its hospital roster to four.
The most recent came last week, when Vanguard announced plans to acquire 333-bed MacNeal Hospital, a not-for-profit facility in the Chicago suburb of Berwyn, Ill.
Terms of the sale were not disclosed. The deal, which still needs regulatory clearance, is expected to close by January.
Vanguard recently completed another significant deal last month with the purchase of two Orange County, Calif., hospitals, 219-bed West Anaheim Medical Center and 130-bed Huntington Beach Hospital, from Dallas-based Triad Hospitals. Terms of the deal weren't disclosed.
Triad is one of the two companies spun off by Nashville-based Columbia/HCA Healthcare Corp. earlier this year.
Prior to the California and Illinois deals, Vanguard's only hospital was Phoenix's 213-bed Maryvale Hospital Medical Center, which it bought last year from the Phoenix-based Samaritan Health System. Samaritan has since been acquired by Fargo, N.D.-based Lutheran Health System and the merged organization is called Banner Health System (Sept. 6, p.22).
Robert Galloway, Vanguard's senior vice president of development, said the recent flurry of activity is a combination of people finding out more about Vanguard and changes in the healthcare market which mean "people are concerned about access to capital." Being a for-profit hospital company makes that access to capital easier.
Galloway said Vanguard's move into suburban Chicago is in keeping with its strategy to focus on large urban markets.
MacNeal has been on the prowl for a partner since this summer (July 12, p. 25).
MacNeal President Brian Lemon declined to say which other suitors were interested in MacNeal.
The deal with Vanguard includes the entire MacNeal Health Network, which includes, besides the hospital, a network of primary-care and occupational health centers and a home-care agency.
The MacNeal network earned net income of $11.6 million on total revenues of $268 million for the 1998 fiscal year, which ended Sept. 30, 1998, a MacNeal spokeswoman said.