Tenet Healthcare Corp. continued to add Roman Catholic hospitals to its for-profit system with a definitive agreement to buy two California facilities from Carondelet Health System, St. Louis.
Tenet, based in Santa Barbara, Calif., will pay $55 million for 360-bed Daniel Freeman Memorial Hospital, Inglewood, Calif., and 138-bed Daniel Freeman Marina Hospital, Venice, Calif., a deal first disclosed by Modern Healthcare (June 4, p. 6).
In addition to the $55 million purchase price, Tenet also has agreed to finance $50 million in capital improvements and service expansions at the hospitals during the next 10 years.
After the acquisition, eight of Tenet's 113 acute-care hospitals will be Catholic. The deal requires the approval of California's attorney general. It is expected to close later this year.
Tenet will add its ninth Catholic hospital later this month with the completion of its acquisition of 460-bed St. Mary's Hospital, West Palm Beach, Fla.
As in other transactions with Catholic hospitals, Tenet has agreed to follow the Ethical and Religious Directives for Catholic Health Care Services at the two Daniel Freeman hospitals. The directives address moral issues for Catholics, including providing pastoral care, prohibiting euthanasia and banning abortions.
Carondelet President and Chief Executive Officer Andrew Allen said Tenet's experience with Catholic hospitals made the company more attractive. "Dealing with a sophisticated purchaser like Tenet is a plus," Allen said.
Carondelet is no longer able to sponsor the hospitals because of mounting losses, which have totaled more than $20 million in the past 12 months, Allen said.
Meanwhile, Carondelet is selling its remaining California hospital, 83-bed Santa Marta Hospital in Los Angeles. Allen said a not-for-profit buyer has been found and the sale is in due diligence. Citing confidentiality issues, Allen said he could not disclose the purchaser.