Prospect Medical Holdings is looking to sell Crozer Health within a year, the private equity company said Thursday.
Prospect said in a statement it will work with Morgan Stanley to advise on the sale—a process it hopes to begin after 60 days.
Related: Crozer Health to cut 4% of employees as it battles financial woes
Upland, Pennsylvania-based Crozer has struggled to navigate the rising costs of staffing and supplies. The health system estimated in March it was losing $7 million each month. It also announced plans at the time to lay off 215 employees, or 4% of its workforce, as part of an organizational restructuring.
The Pennsylvania Attorney General’s Office and the nonprofit Foundation for Delaware County agreed to pause ongoing litigation against Prospect for 270 days to allow it to concentrate on potential transactions, according to a news release. The agreement is subject to court approval.
Prospect bought Crozer in 2016, converting it to a for-profit and saying it would make significant capital investments in the operation.
Prospect's legal battle stems from its plans to repurpose Crozer's Delaware County Memorial Hospital as a behavioral health facility, which received considerable pushback from community members, including the lawsuit filed last year. Last October, a Pennsylvania judge temporarily blocked the plans. Soon after, however, the Pennsylvania Department of Health stopped patient admissions and emergency care at the hospital due to understaffing.
"The foundation is hopeful that a high-quality, nonprofit system or consortium of systems will come forward to acquire a healthcare system that so many Delaware County residents need and deserve," the Foundation for Delaware County said in the release.
Crozer's other facilities include Taylor Hospital, Springfield Hospital and Crozer-Chester Medical Center. It suspended inpatient and emergency services at Springfield Hospital in 2021.
In early 2022, Wilmington, Delaware-based ChristianaCare signed a letter of intent to buy Crozer, but the deal fell through later that year.
