The nation's largest Jesuit Catholic university, Loyola University Chicago, announced intentions to sell its academic medical center in the Chicago suburbs to the national Roman Catholic system Trinity Health of Novi, Mich.
Loyola selling Chicago-area hospital to Trinity
Under the terms of a letter of intent jointly announced Friday by Loyola and Trinity, the 535-bed Loyola University Medical Center and its network of clinics and campuses would be sold to Trinity in a transaction that would include $150 million to build a “state of the art medical research enterprise” on the medical center's campus in Maywood, Ill., the systems said.
Trinity operates 33 hospitals and manages another 14 under contract in 10 states across the country, but Loyola University Medical Center would become Trinity's second-largest hospital after the transaction is complete.
The deal still requires approval from regulators and the Loyola and Trinity boards.
Running the academic medical center has not been a profitable enterprise for Loyola University in the past several years, according to bond ratings analysts. The university has transferred millions to the health system to keep it from defaulting on bond covenants since 2008. Last year, the system laid off 14% of its workforce, finishing fiscal 2010 with a $7 million operating loss—an improvement over the $37 million loss seen in fiscal 2009, according to a report from Moody's Investors Service.
The news comes amid a raft of sales of Catholic hospitals in the past year, including three acute-care hospitals in Chicago that were purchased or are in the process of being acquired by the secular, private-equity backed Vanguard Health Systems. Seeing the trend, the nation's largest Catholic provider, Ascension Health, announced last month that it was forming its own for-profit, equity-backed Ascension Health Care Network, whose goal is to purchase hospitals but help them maintain authentic Catholic identities.
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