Ascension Health, the nation?s largest Roman Catholic and not-for-profit system, announced today that it will grow even bigger. Ascension has signed a letter of intent to merge with Carondelet Health System, also a Catholic system based in St. Louis. The Carondelet system?s sponsor, the Sisters of St. Joseph of Carondelet, would become the sixth sponsor of Ascension Health and would receive a seat on Ascension?s board.
If the deal is completed, Ascension would own and operate more than 70 hospitals and control assets worth nearly $10 billion.
Fifteen Carondelet-sponsored facilities, including eight acute-care hospitals, will become part of Ascension Health, said Carondelet President and CEO Andrew Allen. The proposed merger agreement excludes Carondelet?s lone California hospital, which already has a buyer lined up.
?We are extremely pleased, and we think it?s good for Catholic healthcare in general and good for both Ascension and Carondelet,? Allen told Modern Healthcare?s Daily Dose. ?Our sponsors are excited about working together.?
Carondelet expects to sign a definitive agreement with Ascension in ?early fall? and to complete the proposed transaction by year?s end, Allen said. The transaction represents a ?milestone in an evaluation and strategic planning process? undertaken in 2001 by CHS to address financial and operation issues within the system, CHS officials said.
Although the deal is billed as a merger, Carondelet would be subsumed into the much-larger Ascension system. Ascension owns and operates more than 60 healthcare facilities in 15 states and the District of Columbia, with total assets of $8.9 billion and $352 million in indigent care, system officials said. Carondelet, with total assets of $985 million, provides about $75 million in charity and community programs.
If the transaction is completed as proposed, the Sisters of St. Joseph of Carondelet will join the four provinces of the Daughters of Charity and the Sisters of St. Joseph of Nazareth as sponsors of Ascension Health.
?CHS is pursuing other opportunities with their (California) hospitals,? Ascension health spokeswoman Shari Shane said. ?But CHS? (remaining) entities will be transferred to Ascension in a membership transfer.?
In February, a new for-profit company, Star Healthcare Group, Newport Beach, Calif., announced it signed a letter of intent to buy Carondelet?s 83-bed Santa Marta Hospital, Los Angeles. The Santa Marta sale is expected to close by Aug. 1, Allen said. In December 2001, Carondelet sold its other two California hospitals, 345-bed Daniel Freeman Memorial Hospital, Inglewood, Calif., and 153-bed Daniel Freeman Marina Hospital, Marina del Rey, Calif., for $55 million to for-profit Tenet Healthcare Corp., Santa Barbara, Calif. Tenet recently announced plans to close Marina Hospital.