Caritas Christi Health Care announced Thursday that it has signed an agreement to be acquired by Steward Healthcare System LLC, a newly formed affiliate of private investment firm Cerberus Capital Management, L.P. The deal is subject to customary closing conditions, including approvals from the Massachusetts Attorney General and the Massachusetts Department of Public Health, as well as the approval of the Archbishop of Boston.
With the transaction, Caritas health care system will get approximately $830 million of capital support, including the assumption of all pension obligations for current and former Caritas employees, the repayment of all of the system's outstanding debt, a significant capital investment to fund operations. The deal also brings a commitment to about $400 million of capital projects, including six major construction projects, including immediate upgrades to Caritas hospitals.
Under the deal terms, Caritas Christi will continue to be led by President and Chief executive Officer Ralph de la Torre, together with its current management team, and the company's headquarters will remain in Greater Boston. Six Caritas Christi hospitals will retain their Catholic identities, and their existing policies on charitable and pastoral care, community benefits, and approach to labor relations from a social justice perspective.
The system also said that the acquisition and the conversion of Caritas Christi to a taxable entity, upon approval, are expected to generate significant state and local tax revenues. The process for obtaining the necessary approvals will begin immediately.
Caritas Christi is the largest community-based health care system in New England, with over 13,000 employees, serving over 600 thousand patients annually in 85 communities.
Very Reverend Richard Erikson, Vicar General and Moderator of the Curia of the Archdiocese of Boston, said, "We are encouraged that this agreement between Caritas and Cerberus Capital will enhance the quality of care at Caritas and continue to uphold Catholic teachings and morals. Cerberus' planned investment in the Caritas hospitals will provide needed resources to serve patients with excellent quality and compassionate care long into the future. We look forward to the establishment of a Stewardship Agreement, whereby the Archbishop of Boston will assure Caritas continues to be guided by Catholic teaching, morals and the Ethical and Religious Directives."
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