CATHOLIC HEALTHCARE WEST: Capitalizes On UniHealth Purchase
Catholic Healthcare West "may have gotten the deal of a lifetime with its pending acquisition" of eight hospitals owned by Burbank-based UniHealth, Modern Healthcare reports. While a top CHW official declined to say how much the deal would entail, a source said CHW is buying the hospitals for $300 million, which will go toward UniHealth's estimated $330 million in debt. CHW "will retain about $150 million in UniHealth working capital and will hold at least $145 million in accounts receivable." Overall, Modern Healthcare reports, CHW will "buy $295 million in assets for $300 million, and for the additional $5 million will get eight hospitals with a total of 2,100 beds in the second-most populous metropolitan area in the U.S." Rick Grossman, general counsel for CHW's Southern California region, said, "We try and do transactions that are nondilutive and have no bad financial effect, and the UniHealth transaction has a very positive effect." Grossman "said the purchase price was less than $300 million." The deal is still awaiting regulatory approval by the state attorney general's office. If approved, the deal would give CHW 10 Los Angeles-area hospitals, 14 Southern California hospitals and 45 statewide, "making it California's largest hospital operator." Modern Healthcare reports that the sale would also help CHW with its push to expand into Southern California. Steve Valentine, president of the consulting firm Camden Group, said, "I believe they will seek strategic linkages within communities to enhance their market conditions." CHW spokesperson Joyce Hawthorne acquiesced, saying, "I'm sure it will be something we will pursue" (Shinkman, 10/26 issue).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.