Saint Mary’s Hospital (Saint Mary’s) and Tenet Healthcare Corporation (Tenet) today announced plans for Saint Mary’s to be acquired by a subsidiary of Tenet, a leading healthcare services company which operates 79 acute care hospitals and 189 outpatient centers in 16 states. The transaction, which is subject to the execution of a definitive transaction agreement, state and federal regulatory approvals and other conditions, represents an opportunity to provide continued access to comprehensive healthcare to the Waterbury community by an organization that has been serving the community for over one hundred years.
Following approval and completion of the transaction, Saint Mary’s Catholic heritage and the Ethical and Religious Directives under which the hospital currently operates will be honored and maintained. In addition, Saint Mary’s will continue to abide by the same charity care and uncompensated care policies as in the past and will fulfill the community benefit standards required of tax-exempt hospitals, which include improving access to care and the health status of the elderly, the poor, immigrants and other at-risk populations.
A Local Advisory Board will be established, and will provide input and oversight of hospital operations. The Advisory Board will have reserve powers regarding proposed subsequent transactions involving Saint Mary’s. In addition, the proposed terms of this transaction provide that all employees will be offered employment at the closing.
Proceeds from the transaction will be used to fully fund the Saint Mary’s pension and eliminate debt. When the transaction is completed the Saint Mary’s Foundation will receive a significant cash infusion to support local health needs. Tenet has also agreed to invest additional capital in Greater Waterbury to support strategic advancement in technology, clinical care, physician alignment and facilities.
According to Saint Mary’s CEO Chad Wable, “We are pleased to choose Tenet as our preferred partner after a lengthy selection process. This is a dynamic time in healthcare, and we believe that Tenet is the best choice to help Saint Mary’s achieve our goal to be one of the region’s leading healthcare providers. Our community and our caregivers will benefit immensely from the capital and expertise that Tenet will bring to Saint Mary’s.”
A Saint Mary’s Task Force has been engaged in a thorough and deliberative selection process for more than four years. During that time the Task Force analyzed a variety of capital raising options to find the best solution for Saint Mary’s. Saint Mary’s representatives considered numerous potential suitors, both regionally and nationally, before naming Tenet as their preferred choice.
“Saint Mary’s strong operating performance in recent years was an important aspect of the process, since we were able to approach our negotiations from a position of financial strength and with a track record of clinical quality, safety excellence, and high patient satisfaction,” said Bob Mazaika, Saint Mary’s Board Chairman and Chairman of the Task Force. “Tenet’s proposal offers the best solution for Saint Mary’s today and in the future.”
“We are very pleased that Saint Mary’s has selected Tenet,” said Trip Pilgrim, Senior Vice President at Tenet. “This proposal offers Saint Mary’s financial stability and sustainability, and offers the community the kind of high quality, comprehensive healthcare it deserves, all while retaining the heritage and legacy Saint Mary’s has established over the last century.”
Tenet has significant experience operating faith-based organizations, including Catholic facilities. Among its Catholic facilities is St. Vincent’s Medical Center in Worcester, MA, which is operated with guidance from the local archdiocese. In addition, Tenet operates facilities with Catholic heritage in Tennessee, Missouri and Florida. The proposed Saint Mary’s transaction is not subject to the completion of other potential transactions by Tenet in Connecticut.
“Saint Mary’s strategy and related capital needs have evolved as the transformation of the healthcare industry has accelerated,” said CEO Wable. “Tenet’s view of the future is in synch with ours, and will enable Saint Mary’s to capitalize on our clinical and financial strengths as we move forward.”
“We are grateful for the leadership and cooperation of both Governor Malloy and Mayor O’Leary, and ask for the community’s support throughout the approval process to ensure a timely and smooth transition to a bright and exciting future for Saint Mary’s Hospital and for the greater Waterbury community” said Wable. “Throughout this process, our patients, staff, and this community have been our top priority and we will remain focused on providing exceptional care to every patient, every day.”
More information about the transaction can be found at www.stmh.org.