Steward agrees to sell doctors group to private equity firm
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Carney Hospital in Dorchester. Photo: Suzanne Kreiter/The Boston Globe via Getty Images
Steward has reached a deal to sell its doctors group, Steward Health Care, to a healthcare network affiliated with the private equity firm Kinderhook.
The big picture: Rural Health Group would take over the 5,000-physician group operating in Massachusetts and nine other states.
Driving the news: Kinderhook agreed to pay $245 million under the agreement, per a filing in Houston bankruptcy court.
- The companies will need regulatory approval before moving forward.
Rural Healthcare Group operates 17 clinics in Tennessee and North Carolina.
- The company said in a press release it will make "significant investments" in the doctors group's infrastructure.
- RHG said it will "keep healthcare local" so patients can continue seeing providers who know their medical histories.
- The providers will work out of the same facilities, per a Kinderhook spokesperson.
Between the lines: This is Steward's second time presenting a deal to sell its doctors network. Steward said in late March it had signed a letter of intent to sell the network to Optum, but the deal fell through.
- A Kinderhook spokesperson told Axios it learned of the sale opportunity in January.
- The company was interested in the doctors group, in part, because it serves patients across various socioeconomic backgrounds.
Context: The agreement comes as Steward is in negotiations to sell five of its Massachusetts hospitals.
- It plans to close two other facilities, Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer, by Aug. 31. Steward said they had no qualified bids for them.
- Insight Health System in Michigan bid to buy all of the Massachusetts hospitals, but Insight and Steward couldn't reach an agreement on the terms.
- Atif Bawahab, chief strategy officer at Insight, issued a statement earlier this month saying, "a mutual agreement was not reached, but we remain interested in being part of the solution to keep the hospitals' doors open."
What's next: Steward is due in bankruptcy court Friday, where it will be up to a judge to approve the sale to Rural Healthcare, as well as the sale of Steward hospitals.
- The sale to Rural will also be subject to regulatory approval in Massachusetts and other states.
Dan Primack contributed reporting.