Trinity to sign Loyola deal today

0

Novi-based Trinity Health is expected to complete today its nearly $100 million acquisition of the Loyola University Health System, a deal that gives the fourth-largest Catholic health system its first direct affiliation with a university medical center.

Trinity announced in March that it had signed a letter of intent to buy the Loyola health system from Loyola University Chicago around July 1. The deal – Trinity’s largest acquisition to date and its first entry into the Chicago market — is expected to add nearly 6,900 employees, two hospitals and 28 care facilities to its large portfolio of 46 hospitals in several states and some 48,000 employees.

As part of the deal, Trinity is expected to invest $300 million over five years in capital improvements and equipment at Loyola Health, and possibly another $100 million later, according to an April letter from Loyola University President Michael J. Garanzini and a more recent agreement between the parties. Trinity also will make a yearly payment of $22.5 million, plus adjustments for inflation, to the university’s Stritch School of Medicine and will assume all health system liabilities and debts, according to the letter.

Loyola and Trinity each also plan to contribute $75 million toward a $150 million medical research building on Loyola’s Maywood, Ill., campus.

Trinity Health spokeswoman Eve Pidgeon couldn’t confirm any details of the proposed transaction Wednesday. Loyola university and health system officials did not return calls for comment.

Loyola has said the deal is expected to close today, and a ceremony marking the purchase will be held today at the university’s medical school.

“I am confident that our collective skill and scale will bring economies and collaboration, and will advance patient care, health sciences education and research,” Garanzini wrote in the April letter to the campus, posted on the Loyola website. “I believe this partnership with Trinity Health provides the greatest opportunity to invest in and grow the Loyola University Health System while securing the future of the university’s health sciences enterprise. In addition, my hope is that this consolidation will also advance Catholic health care in Chicago and across the nation.”

The Loyola health system has struggled financially but has seen improvements the past two fiscal years. The health system generates about $1.1 billion in annual revenue.

Trinity CEO Joseph R. Swedish told The Detroit News in March that the acquisition will broaden its continuum of health care services and gives Trinity access to research and education. At that time, he said the deal could mean more employees in Novi, where Trinity employs about 3,000.

Trinity will take over ownership of the Loyola University Medical Center and Gottlieb Memorial Hospital from Loyola University Chicago, while the university’s medical school and the Marcella Niehoff School of Nursing will continue as schools of the university, with Trinity supporting the schools, according to Garanzini’s letter.

Tony Colarossi, a health care consulting partner with Plante & Moran, said the deal could be a precursor to additional growth for Trinity.

“(It) makes me wonder if they have further acquisitions in the area planned,” he said.

Trinity is open to bringing other Chicago-area Catholic hospitals into its system, according to a Loyola question-and-answer document about the sale on its website.

Independent health care analyst Allan Baumgarten said there is competition among Catholic health systems.

“Maybe Trinity thought that if it didn’t go after Loyola, then Ascension (Health), or another Catholic system or a Vanguard (Health Systems Inc.), would try to make the deal,” said Minnesota-based Baumgarten.

Similar Posts:

Share

No Comments Yet

Your Responses