After two failed attempts to sell Anaheim (Calif.) Memorial Medical Center, Memorial Health Services thinks it has finally found a buyer that can scrawl a checkmark next to all the required boxes.
Pacific Health Corp., Tustin, Calif., has agreed to pay $57.1 million for the 223-bed hospital and invest at least $18 million in the hospital in the first three years after completing the deal, according to Memorial, located in Huntington Beach, Calif. Pacific also agreed to maintain the current level of emergency and inpatient services. The company owns and operates four hospitals with six campuses in Southern California.
Pacific is the third investor-owned company to agree to buy Anaheim Memorial, but the system believes it will be the one to get the job done because it is financially strong and has community support, a Memorial Health spokeswoman said.
James Young, president and chief executive officer of Pacific, said the company already has its financing in place. Integrated Healthcare Holdings, Santa Ana, Calif.the second company to agree to buy Anaheim Memorialdropped out in January when it could not provide enough documentation to lenders in time to complete the deal. Integrated was seeking financing for its bid of $68 million in cash and $28.7 million in capital improvements.
Pacific also has established itself as a provider in Southern California, Young said. Weve been in this area since 1984, Young said. We think that we have a lot of community support that will help us in this process.
That contrasts with the winner of the first round of bidding, Prime Healthcare Services, Victorville, Calif. Physicians, managed-care organizations and unions all have clashed with Prime Healthcare as it has grown to nine California hospitals since 2004. Prime Healthcare had to end its $55 million bid for Anaheim Memorial when the California attorney generals office denied approval of the deal in July 2007. The attorney general ruled that the sales process had not been open, fair and transparent enough.
The hospital would be the first not-for-profit hospital acquired by Pacific, Young said. The company had not filed for approval with the attorney generals office as of last week, he said. Pacific expects to complete the deal within 90 to 120 days, Young added.
Memorial Health announced in July 2006 that it would seek a partner or buyer for Anaheim Memorial as part of its plan to invest in its other five hospitals in Southern California.