Cerberus to buy Caritas Christi for $830 million

Private-equity firm Cerberus Capital Management, New York, has agreed to acquire Caritas Christi Health Care, Boston, for $830 million, including the Catholic system's pension liabilities and virtually all of its debt.

The deal closes the struggling health system's search for a buyer after the nation's largest Catholic health system, 75-hospital Ascension Health, St. Louis, and six-hospital Caritas called off a tentative agreement in 2007.

Caritas Christi closed its books at the end of September with operating income of $54.3 million, including the $23.7 million sale of its medical laboratory subsidiary, on $1.32 billion in revenue after losing $20.5 million on $1.28 billion the prior year.

Under the agreement, Cerberus will repay nearly all of Caritas Christi's outstanding debt, invest $400 million in major construction projects to upgrade each of the system's hospitals, and make unspecified investment in operations, according to a written statement announcing the deal.

The deal must be approved by the Massachusetts Public Health Department, the state attorney general and the Archdiocese of Boston. Caritas Christi will continue to adhere to Catholic ethical and religious rules for medical care and follow church policies for free and discounted care and other subsidized services known as community benefits, pastoral care and labor relations, according to the statement.

Ralph de la Torre will remain president and CEO, and the system will retain its management and residency and teaching programs, according to the statement.