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Steward Mulls $1.1B Jackson Health Takeover

John Commins, for HealthLeaders Media, February 22, 2011

Steward Health Care System, the physician-led operator of eight acute care hospitals in the Boston area, has expressed an "interest" in taking over Jackson Health System, Miami's financially troubled safety net hospital, in a deal that -- if completed -- would be valued at about $1.1 billion.

In a non-binding letter sent Monday to John Copeland, chairman of the Public Health Trust, which oversees JHS, Steward Healthcare CEO/ChairmanRalph de la Torre, MD, said he "envisions a transaction" under which SHC would assume JHC's approximately $500 million in outstanding debts, and invest another $600 million in capital and infrastructure improvements.

"Not only will this investment allow JHS to modernize its facilities and equipment, it will have the added benefit of creating economic activity that will mean thousands of additional jobs for the people of Miami-Dade County," de la Torre said in the letter.

"The combination of infused capital and cash to fund debt will yield an investment by SHC of over $1 billion. This investment will be further augmented by any cash SHC needs to invest to fund losses on operations during the 'turn around' phase of our involvement. (We estimate that the current 'run rate' of these losses is $190 million to $200 million per year.)" de la Torre said in the letter.

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