The University of Kansas Health System and for-profit Ardent Health Services are creating a joint venture company to purchase 378-bed St. Francis Health in Topeka, Kansas.
Terms were not disclosed.
The deal is the sixth such joint venture that Ardent has announced with a not-for-profit academic medical center. The arrangement allows the partners to share the capital costs of buying and building out the capabilities of targeted hospitals.
Ardent also brings business practices and purchasing economies to the acquired hospitals, while KU Health contributes clinical expertise and brand equity to the deals.
As part of the deal, the Kansas joint venture plans to spend $50 million at St. Francis Health to improve and expand services, the companies said Thursday.
Ardent operates 20 hospitals in six states with more than 500 employed physicians and 18,000 employees.
Its six joint venture partnerships include Seton Healthcare, Hackensack Meridian Health Network and Sacred Heart Health System.
"We are honored to partner with The University of Kansas Health System to support the excellent work of St. Francis Health's dedicated physicians, nurses and employees," said David T. Vandewater, president and CEO of Ardent Health Services.
For KU Health, St. Francis is the second community hospital that the system has added this year.
In January, KU acquired Hays Medical Center, a 207-bed hospital located 260 miles from Kansas City in Hays, Kan.
Hays is profitable, pulling in 65% of the patient volume in its market area and posting a strong 4.2% operating margin over the past two years, according to a recent report by Fitch Ratings.
The Ardent joint venture will spare KU Health some of the expense of acquiring St. Francis alone.
The financing authority for the system announced a bond offering last month for $190.2 million to add extra floors to a patient tower at the main campus and repay $40 million in debt owed by Hays.
Strong patient demand at the 633-bed main hospital prompted KU Health to upsize the patient tower by four floors to the original eight-floor north patient tower construction project.