After almost two years of negotiations with potential buyers, the Daughters of Charity Health System (DCHS) Board of Directors has selected a private investment firm to recapitalize its heavily in debt healthcare system.
BlueMountain Capital Management (BlueMountain) was selected after offering a deal that would contribute over $250 million of capital to repay outstanding obligations, provide operational liquidity and invest in physical plant improvements for DCHS.
An independent board of directors from Integrity Healthcare, an entity owned by BlueMountain, will manage DCHS for 3 years as a non-profit. BlueMountain will then have an option to purchase the health system after that period.
“In evaluating candidates to manage the hospitals, our priority was to seek the strongest bidder who could provide the greatest long-term financial stability while honoring the obligations to our associates, physicians, retirees and other constituents,” said DCHS President and CEO Robert Issai.
The agreement between BlueMountain and DCHS also includes an immediate conversion of all pension and retirement plans that are “church plans” to become subject to The Employee Retirement Income Security Act’s requirements.
“We are excited to provide substantial expertise and financial capital to DCHS, positioning the hospitals to meet the evolving health care needs of the region,” said a BlueMountain press release.
