SSM Healthcare, St. Louis, said Lincolnshire Management, a New York-based private-equity firm, has withdrawn its offer to purchase St. Francis Hospital and Health Center in Blue Island, Ill., according to an internal memo to employees from Bill Schoenhard, SSMs chief operating officer.
Chicago-based company Transition Healthcare intended to acquire the 282-bed hospital with support from Lincolnshire. Arnold Kimmel, chief executive officer at Transition, said the company views St. Francis as a quality hospital with a bright future and is in conversations with other financing sources to purchase the facility.
We learned on Monday, and we were disappointed, certainly, that the proposal and acquisition needed to be withdrawn, Kimmel said of Lincolnshires decision. Transition Healthcares intention is to pursue other financing and submit a new proposal to SSM Healthcare. We hope it will be in the next few weeks.
A Jan. 16 letter of intent to the Illinois Health Facilities Planning Board stated that the intention of BI Healthcarethe entity controlled by Lincolnshire for the dealwas to acquire St. Francis for a maximum acquisition cost of $40 million, lower than the maximum value listed in an initial letter sent in October 2007. The guidelines were always not to exceed, Kimmel said of the value. The price we agreed on was lower than that.
SSM would not comment beyond its memo, which also said the system is reviewing options for next steps. Allan Weinstein, a managing director at Lincolnshire, said he could not discuss specific reasons for the deals failure due to a confidentiality agreement.
We determined that the investment didnt fit our investment parameters, Weinstein said. -- by Jessica Zigmond
What do you think? Post a comment on this article and share your opinion with other readers. Submit your letter to Modern Healthcare Online at [email protected]. Please be sure to include your hometown and state, along with your organization and title.