Prime Healthcare Services and St. Mary’s Hospital Sign Binding Asset Purchase Agreement

 

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Critical Step Toward Preserving St. Mary's as Acute Care Hospital

(Passaic, NJ) - St. Mary's Hospital and Prime Healthcare Services announced on January 30, 2013 that they have agreed to and signed an Asset Purchase Agreement (APA).  The binding document is a critical step forward for Prime Healthcare to finalize its acquisition of the Passaic-based hospital.  The APA follows comprehensive due diligence performed by both organizations. The two organizations had signed a non-binding Letter of Intent in November of 2012.

The purchase of St. Mary's by Prime Healthcare will ensure that the hospital remains open and continues its mission to serve the people of Passaic and the surrounding communities.  Prime Healthcare has already begun to support St. Mary's with working capital advances to strengthen the hospital's financial capacity until the deal is completed.

Prime has agreed to keep St. Mary's open as an acute care hospital for at least five years and it will also continue to operate the hospital in a manner that is consistent with the Ethical and Religious Directives that have defined St. Mary's for over a century. As such, Prime will adopt charity care policies which are at least as generous as those currently utilized by the hospital.  Prime will maintain a local governing board.  The APA also calls for Prime to assume the existing Collective Bargaining Agreement with JNESO which represents a number of nursing and clinical employees.

"Passaic residents deserve exceptional patient care, and Prime Healthcare is committed to delivering high-quality healthcare at St. Mary's, while preserving the hospital's charity care initiatives," said Prem Reddy, M.D., FACC, FCCP, Chairman, President and CEO of Prime Healthcare Services. "We look forward to working with St. Mary's as we seek approval from the state. Prime Healthcare's motto is 'Saving Hospitals, Saving Jobs and Saving Lives', and we plan to continue that at St. Mary's and help it become one of the best hospitals in the state and the country."

"After a competitive bidding process and a thorough review that followed our initial agreement with Prime, I could not be more enthusiastic about this acquisition," said Edward J. Condit, St. Mary's President & CEO. "From the financial support to the terms of the APA, it is clear that Prime offers the best way forward for St. Mary's. Prime has given St. Mary's an excellent opportunity to not only be viable, but to grow and prosper. We must proceed as quickly as possible to finalize this sale in order to protect and secure the healthcare needs of the Passaic community."

In addition, the APA calls for Prime to hire all current St. Mary's Hospital employees.  Moreover, beyond the price of the acquisition, Prime will invest $30 million in capital improvements over the next five years beyond routine replacements and additions.  As a result, Prime will save jobs.

"We are eager to join the family of hospitals currently operated by Prime. The terms of the asset purchase agreement are quite generous and this framework will allow St. Mary's to achieve financial stability and continue its mission to successfully serve the people of both Passaic and the surrounding communities," said Sr. Barbara Conroy, S.C., Chair of the St. Mary's Hospital Board of Trustees. "We look forward to working closely with Prime throughout this transition in order to usher in this new and exciting era for Passaic healthcare."

Assemblyman Gary Schaer applauded the decision. "This acquisition is a major victory for the City of Passaic.  Prime Healthcare is an award-winning national health system that is known for transforming struggling hospitals into models of patient care. After a spate of recent hospital closings and the subsequent lack of accessible healthcare, the Passaic community is uniquely deserving of having a nationally recognized health system revitalize our hospital. Prime's successful history proves that it is capable of swiftly accomplishing this task and I hope that the state understands the urgency with which this purchase must be approved."

Ishak Soliman, President of St. Mary's Medical/Dental Staff, added, "Nearly all of St. Mary's quality and safety scores have been steadily climbing, making it a perfect fit for Prime's strategic focus on quality. This sale will ensure that St. Mary's not only remains open, but continues to provide an even higher standard of care. I look forward to working with them as we move forward."

The transaction is awaiting regulatory approvals by the Department of Health and the Attorney General's office, as well as approval from the Vatican.

Prime Healthcare, an award winning health system, was nationally recognized in 2012 as one of the "15 Top Health Systems in the Nation" by Thomson Reuters, based on quality of healthcare and patient satisfaction. It also was recognized as a top health system in 2009.  Five Prime Healthcare hospitals were ranked among the "100 Top Hospitals in the Nation" in 2012.

Recently, The Joint Commission, the leading Medicare accreditation organization in the country, announced that eight Prime Healthcare hospitals earned national recognition as "Top Performer on Key Quality Measures" (Top 18 percent).

About Prime Healthcare Services

Ontario, CA-based Prime Healthcare Services (www.primehealthcare.com), with a motto of "Saving Hospitals, Saving Jobs and Saving Lives," is one of the largest hospital companies in the nation.

Prime Healthcare was recognized as one of the "15 Top Health Systems in the Nation" in 2012 by Thomson Reuters, based on quality of healthcare and patient satisfaction. It was also recognized as a top health system in 2009. Five Prime Healthcare hospitals were ranked among the "100 Top Hospitals in the Nation" in 2012 by Thomson Reuters. Eight Prime Healthcare hospitals earned national recognition as "Top Performer on Key Quality Measures," (Top 18 percent), in 2012 from The Joint Commission, the leading Medicare accreditation organization in the country.

Through their subsidiaries, Prime Healthcare Services and the non-profit Prime Healthcare Foundation have more than 15,000 employees and own and operate 20 acute-care hospitals: Alvarado Hospital Medical Center, Centinela Hospital Medical Center, Chino Valley Medical Center, Desert Valley Hospital, Encino Hospital Medical Center, Garden Grove Hospital Medical Center, Huntington Beach Hospital, La Palma Intercommunity Hospital, Montclair Hospital Medical Center, Paradise Valley Hospital, San Dimas Community Hospital, Shasta Regional Medical Center, Sherman Oaks Hospital and West Anaheim Medical Center - in California, Saint Mary's Regional Medical Center - in Nevada, Lower Bucks Hospital and Roxborough Memorial Hospital - in Pennsylvania, Dallas Medical Center, Harlingen Medical Center and Pampa Regional Medical Center - in Texas.