MSMC Investors LLC and SSM Health Care Sign Deal That Will Keep St. Francis Hospital & Health Center Open
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May 8, 2008 – For immediate release
Full Transfer of Ownership Expected in 60 to 90 Days; New Hospital Will Be Named MetroSouth Medical Center
Blue Island, IL – MSMC Investors LLC and SSM Health Care said today that they have signed an agreement to transfer ownership of St. Francis Hospital & Health Center from SSM to MSMC, ensuring that the hospital will remain open and continue to serve the city of Blue Island and surrounding communities.
The agreement sets out the terms for the transfer of the 410-bed hospital, SSM Home Care at St. Francis and SSM Hospice at St. Francis to MSMC Investors LLC, which was created by Transition Healthcare Company and its financial backer, Falcon Investors LLC, as the holding company for the hospital and related health care assets.
Falcon Investors is the majority owner of MSMC Investors and Transition holds a minority interest and will be responsible for managing the hospital on a day to day basis. MSMC stands for MetroSouth Medical Center, which will be the new name of the for-profit hospital.
Arnold Kimmel, CEO of Transition Healthcare, will become CEO of MetroSouth Medical Center.
“We know how important it is to residents of Blue Island and the surrounding communities to keep the hospital operating for the long term and we intend to do just that,” Mr. Kimmel said.
“This agreement would not have happened without the diligent efforts on the part of SSM Health Care and MSMC Investors. We are also grateful for the support of Mayor Don Peloquin and the Blue Island City Council, State Senator Emil Jones, Jr., the Office of Governor Rod R. Blagojevich, State Representative Robert Rita, State Representative Kevin Joyce, State Representative Monique Davis, State Representative Will Davis, and Congressman Bobby Rush,” Mr. Kimmel added.
Both parties said the terms of the agreement were confidential. However, Lawrence Krule, Executive Vice President of Falcon, who will become Chief Restructuring Officer of MetroSouth, said MSMC Investors and its affiliates will be investing approximately $30 million in new hospital equipment, such as a 64-slice CT Scanner, a PACs imaging system, a new mammography unit and upgrades to patient rooms, as well as investing additional working capital.
“This significant level of investment reflects our hope and aspiration for what we can achieve in the turnaround of the hospital for the communities it serves and for the employees,” Mr. Krule said.
St. Francis Hospital & Health Center was founded in 1905 as a Catholic, not-for-profit health care institution. St. Francis is an acute-care hospital providing primary, secondary and tertiary levels of care. Known nationally as a top cardiology hospital, St. Francis offers a comprehensive range of medical, surgical, pediatric and obstetrical care and services.
“We are very pleased that we have reached an agreement with MSMC Investors LLC and Transition Health Care that will allow this beautiful hospital to remain open – for the people of the community that SSM has served for more than a century, and for the employees and physicians who work here,” said Sister Mary Jean Ryan, FSM, president and chief executive officer of SSM Health Care, a St. Louis-based Catholic health care system.
SSM said in early April that it would close the hospital if its efforts to find a buyer were unsuccessful.
“SSM Health Care is grateful for the support of the many elected officials as we worked through this process. We are grateful, as well, for support from employees, physicians and the community for St. Francis,” Sister Mary Jean continued. “Most of all we are grateful for the many prayers and the hard work that went into signing this agreement.”
The transaction received support at every level of government, in particular Senator Jones, Mayor Peloquin and the Blue Island City Council, which passed resolutions last week in support of the sale and of financial incentives for the redevelopment and continued operation of the hospital.
“The hospital’s reputation and record for excellent quality of care, its highly experienced and loyal staff and its first-rate physical plant were the primary reasons we decided to acquire the hospital,” Mr. Kimmel said. “We’ve put together a team with the experience, ability, desire and resources to keep the hospital open for the benefit of the community and the region over the long term.”
Transition Healthcare Company LLC (THC) www.TransitionHC.com is a newly formed company with offices in Chicago and Nashville, TN. The THC management team has more than 100 years of combined hospital and healthcare management experience. THC's believes strongly that providing demonstrably high-quality care is the primary obligation of its hospitals. Transition CEO Arnold Kimmel will become the hospital’s new CEO. Mr. Kimmel has more than 30 years experience in hospital and health system management and as interim CEO led the successful turnaround of Catholic Health Partners in Chicago.
Falcon Investors, LLC’s www.FalconInvestors.com management has a collective 80 years of experience in closing complex real estate transactions, and development of senior housing that span the continuum of care from independent housing, assisted living, nursing homes and continuing care retirement communities. Its philosophy is to invest for the long term. One of its most recent major projects has been the turnaround of Atlanta-based Centennial Health Care, a 6,300-bed nursing home chain with more than 6,500 employees.
SSM Health Care www.ssmhc.com is sponsored by the Franciscan Sisters of Mary and based in St. Louis, Mo., and is one of the largest Catholic health systems in the country and the first health care recipient of the Malcolm Baldrige National Quality Award. The system owns, manages and is affiliated with 20 acute care hospitals and two nursing homes in four states: Missouri, Illinois, Wisconsin and Oklahoma. More than 5,000 affiliated physicians and 24,000 employees work together to provide a wide range of services that are compassionate, holistic and of high quality.