Investment Firm BlueMountain To Purchase Daughters Of Charity Hospitals
LOS ANGELES (CBSLA.com) — The Daughters of Charity of Health System announced Friday it plans to sell its six hospitals, including two in Southern California, to an investment firm.
The proposed transfer of the hospitals to BlueMountain Capital Management comes four months after Prime Healthcare, which originally planned to purchase DCHS, backed out of the deal over strict conditions placed on the sale by state Attorney General Kamala Harris.
According to DCHS, BlueMountain will make an initial capital investment of $250 million, which will be overseen by the firm's subsidiary, Integrity Healthcare.
Like the earlier proposed sale to Prime Healthcare, the BlueMountain transaction must be reviewed and approved by Harris.
The Southern California hospitals in the proposed sale are St. Francis Medical Center in Lynwood and St. Vincent Medical Center near downtown Los Angeles.
According to DCHS, BlueMountain is a New York-based, $21 billion global investment firm.
The proposed sale to Prime Healthcare had been the subject of multiple public hearings that featured opponents claiming Prime would cut services at the nonprofit hospitals to boost the bottom line, while proponents said the hospitals faced possible closure if the deal was not approved.
When Harris approved the sale, she included a dozen conditions, including a requirement that for-profit Prime invest $150 million for capital improvements at the hospitals over the next three years, and mandating maintenance of the hospitals and emergency services for 10 years.
Prime officials initially expressed support for the conditions, but after reviewing them more thoroughly, the company announced in March it was pulling out of the deal.
(©2015 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)
