Waterbury, St. Mary’s hospitals plan to merge

Waterbury Hospital officials will announce later Tuesday a letter of intent to merge with cross town rival St. Mary’s Hospital, a deal, which if approved by regulators, would create one of Connecticut’s largest hospitals.

The combined joint venture would also include Texas-based LHP Hospital Group, which agreed earlier this year to buy a stake in St. Mary’s Hospital.

As part of the proposed agreement, members of the new joint venture will invest $400 million to construct a new state-of-the-art medical center that will replace both The Waterbury Hospital and Saint Mary’s Hospital.

LHP will own an 80 percent interest in the combined joint venture, with Greater Waterbury Health Network, parent of Waterbury Hospital, and St. Mary’s each owning a 10 percent interest. Governance in the for-profit entity will be shared among all three parties.

The combined revenue of both hospitals will be over $520 million, making it one of the larger hospitals in the state.

“This is a momentous day for The Waterbury Hospital and the community we serve,” said Carl Contadini, chairman of The Waterbury Hospital Board of Trustees. “After thoroughly analyzing the health care needs of the greater Waterbury region, we concluded that coming together with LHP and Saint Mary’s to build a modern, state-of-the-art replacement facility would bring the best in health care to patients for generations to come. We will not only create new construction jobs and help the local economy but we will position the Greater Waterbury community to become the regional leader for health care services in southern New England. We could not be more pleased.”

Officials said the combined joint venture will commit to operate its health care facilities in accordance with the “community benefit standards” applicable to not-for-profit health care systems, and will also operate in accordance with the Ethical and Religious Directives for Catholic health care services. 

Meanwhile, the affiliation will allow Waterbury Hospital to retire all of its existing debt, provide security for their pensioner, leverage economies of scale for access to capital and purchasing power, and share clinical best practices, officials said.

The next steps in the transaction will be to complete customary due diligence, negotiate and finalize a definitive agreements, and obtain the necessary approvals from various regulatory bodies.

“The combined joint venture between LHP/Saint Mary’s and The Waterbury Hospital is the realization of a shared vision to create a combined health care delivery system to serve the Greater Waterbury community,” said Robert Mazaika, chair of the Saint Mary’s Joint Venture Task Force. “The Waterbury Hospital and Saint Mary’s have collaborated on a number of successful ventures over the years – including the Harold Leever Regional Cancer Center and the Heart Center of Greater Waterbury – that have greatly benefited the community. Now we have the opportunity to transform the delivery of local health care as a combined system.”