Nashville, Tenn.-based Rural Healthcare Group, part of private equity firm Kinderhook Industries, agreed to acquire financially troubled Steward Health Care's 175-physician group for $245 million in cash.
The sale is a part of the hospital system's plan to mitigate financial distress — Steward sought Chapter 11 protection May 6 and is required to sell its assets through auctions.
Here are seven things to know:
1. In June, Optum, parent company of ASC chain SCA Health, backed out of plans to acquire the 175-physician Stewardship Health.
2. Pending approval, Rural Healthcare Group would take on Stewardship's system — an integration of Steward Health Care Network and the Steward Medical Group, a primary-care network of around 5,000 employed and affiliated providers.
3. RHG, which comprises 17 clinics, will "make significant investments in Stewardship's infrastructure" following the acquisition, according to an Aug. 12 RGH news release, adding that RHG's partnership will "help keep healthcare local for patients."
4. "Transitioning clinics from health system-owned to independent is an area of expertise for RHG, and ultimately a benefit to patients," the RHG release said, referring to the separation of Steward Medical Group and Steward Health Care Network from Steward's hospital system.
5. "As part of the ongoing Chapter 11 proceedings, following a robust and active bidding process, Steward Health Care is pleased to have reached an agreement with Rural Healthcare Group," Mark Rich, president of Dallas-based Steward Health Care, said in a Steward news release. The transaction now awaits bankruptcy court approval, the releases said, and will close based on the completion of closing conditions.
6. Steward Health Care also received bankruptcy court approval to shutter two of its Massachusetts hospitals by Aug. 31. Another Massachusetts hospital is also facing closure from an altered bid from a potential buyer.
7. In July, Steward accepted bids in for hospital sales in Arkansas and Louisiana, and rejected nonviable bids and canceled the auction and sale hearing for two of its hospitals in Ohio and one in Pennsylvania.