PORTLAND, Maine—Eastern Maine Healthcare Systems signed a definitive agreement to acquire Mercy Hospital, a 168-bed hospital in Portland, that is part of Catholic Health East. As part of the deal, EMHS will acquire Mercy and its service units, including VNA Home Health & Hospice in South Portland. EMHS, based in Brewer, owns seven hospitals and is the second largest health system in Maine based on bed count. The organizations announced plans to pursue a deal in December. Four months earlier, Mercy had entered into talks with Steward Health Care System, the Boston-based for-profit health system, but the negotiations later fell through. “EMHS supports our mission and our identity as a Catholic healthcare system,” Eileen Skinner, Mercy's president and CEO, said in a news release. “We look forward to continuing to work with our EMHS colleagues through the approval process and the eventual integration of Mercy into EMHS.” Financial terms of the agreement were not disclosed. However, an EMHS spokeswoman said the system is “committed to investing in necessary capital improvements at Mercy.” Catholic Health East is set to merge with Trinity Health in a deal that will combine two of the largest Catholic health systems in the U.S. Mercy Hospital has been considered a challenge for Catholic Health East and had reported large operating losses in fiscal 2011 and 2010, according to a Moody's Investors Service ratings report from June 2012. The deal is expected to close in the second half of this year.