St. Mary’s Hospital in Waterbury announced Tuesday that it is accepting a $200 million capital infusion from a Texas-based private hospital operator that will take a majority stake in the not-for-profit Catholic health care provider.
The joint venture, which will require regulatory approval, Â is with LHP Hospital Group Inc., a private equity-backed national provider of capital and healthcare expertise.
The deal will shift St. Mary’s not-for-profit business model to a for profit entity.
LHP will own a majority equity position in the newly formed joint venture that will own the hospital, called SW Connecticut Health System LLC. St. Mary’s current staff and management team will remain in place.
Saint Mary’s, with 349 beds, plans to use LHP’s capital infusion to eliminate its debt, provide greater security to its pensioners and establish a sizable foundation which will focus on community health needs.
The deal is valued at $135 million, but the agreement includes a commitment by LHP to make additional investments of at least $75 million for capital expenditures.
In the next five years, LHP’s investments with help the hospital with:
- Implementation of the latest in health information technology, equipment and quality initiatives.
- Facility improvements and upgrades, including new equipment, equipment replacement, facility renovations, medical office space, technology and other capital improvements.
- Further development of existing service lines, including cardiology, neurosurgery, orthopedics, surgical specialties, emergency services and primary care base.
- Enhancement of physician recruitment and employee retention efforts.
- Long-term creation and preservation of jobs and healthcare access in our region.
- Access to experts, resources and best practices of their national healthcare network.
“Our joint venture with LHP will be a transformational event for Saint Mary’s which builds upon our success as one of the highest quality, lowest cost hospitals in Connecticut,” said Chad Wable, CEO of Saint Mary’s Hospital. “The capital investment secures our future as a strong, local healthcare provider while providing greater certainty that we will achieve our vision of being the leading regional provider. We will now have the ability to invest aggressively in technology and services that will make healthcare better and more accessible for our community. We will attract physicians and other providers to our organization while creating economic vitality and jobs in the region.”
Hospital officials said they will continue to abide by the same charity care and uncompensated care policies as in the past.
Saint Mary’s said it contacted more than 16 potential partners across the nation, and met with four finalist firms before choosing LHP.
