Tax-exempt Valley Baptist Health System, Harlingen, Texas, has signed a letter of intent to negotiate a joint venture with investor-owned Vanguard Health Systems, Nashville, according to a news release. The partners expect to finalize a definitive agreement by the end of summer.
Texas system, Vanguard plan joint venture
Broad terms of the partnership were not disclosed. The partnership will enable Valley Baptist to gain access to capital and to strengthen collaborations with physicians, according to the release. One possible move involving both of those reasons would be a buyout of Valley Baptist’s partner in 88-bed Harlingen (Texas) Medical Center—MedCath Corp., Charlotte, N.C. Investor-owned MedCath holds a 34.8% stake in the hospital, according to a securities filing. Vanguard bought MedCath’s 70.6% ownership interest in Arizona Heart Hospital, Phoenix, in October. MedCath is selling off its assets in order to liquidate the company.
Valley Baptist signed a memorandum of understanding last year to merge with a neighboring tax-exempt hospital, Knapp Medical Center in Weslaco, Texas, in the hopes of improving its access to capital. The memorandum expired with no deal taking place. Valley Baptist includes a 480-bed hospital in Harlingen and a 280-bed hospital in Brownsville.
Vanguard recently completed its acquisition of six-hospital Detroit Medical Center.
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.