A letter of intent for CHRISTUS Health to acquire Good Shepherd Health System has been signed, though many details, including the purchase price, must still be finalized.
Good Samaritan Health System has found a faith-based partner in CHRISTUS Health.
After Duke-LifePoint terminated a proposal to buy Good Samaritan earlier this fall, the health system went back to the drawing board in its efforts to find an affiliation partner. Six weeks later, it found a willing suitor in CHRISTUS Health.
The two systems have signed a letter of intent for CHRISTUS to acquire Good Shepherd, though many negotiations, including its purchase price, must still be finalized.
The previous deal with for-profit Duke-LifePoint, a for-profit joint venture between LifePoint, based in Brentwood, TN, and Duke University Health System, was canceled in early October after more than four months of negotiations, leaving board members of the health system, which was an estimated $145 million in debt at the time, disappointed.
Good Shepherd, based in Longview, TX, says the CHRISTUS deal is more attractive because the cultures of the two nonprofits are more similar.
CHRISTUS has 60 hospitals and long-term care facilities and 175 clinics and outpatient centers in 60 cities in the U.S., Mexico, Chile, and Columbia, while Good Shepherd has hospitals in both Longview and Marshall, as well as a multispecialty physician network; freestanding emergency centers; a range of outpatient services; and a medically integrated wellness facility, the Institute for Healthy Living.
The agreement culminates Good Shepherd Health System's search to find an affiliation partner, which was initiated by the system's board of directors and leadership team in August 2015.
"We feel strongly that CHRISTUS Health is the best potential partner for our organization," Good Shepherd President and CEO Steve Altmiller said in a press release.
"After our experience searching for the right fit, it became clear that… a not-for-profit partner based here in Texas could provide Good Shepherd with both the resources to expand the care we currently provide and strengthen our hospitals for the future."
CHRISTUS, a Catholic system, has recently expanded across Northeast Texas.
In May 2016, Trinity Mother Frances Hospitals and Clinics, an eight-hospital system headquartered in Tyler, joined CHRISTUS Health as CHRISTUS Trinity Mother Frances Health System. CHRISTUS Health also operates CHRISTUS St. Michael facilities in Texarkana and Atlanta, TX.
"We know how important the Longview, Marshall, and surrounding communities are to the fabric of Northeast Texas," said Ernie Sadau, president and CEO of CHRISTUS Health, in a statement announcing the deal.
"We are not only looking forward to welcoming these facilities and these communities into the CHRISTUS family, but also the opportunity to bring together two not-for-profit organizations focused on providing the highest quality, compassionate care. We believe this agreement will ensure that Good Shepherd Health System continues its mission to improve the health of the communities it serves."
Good Shepherd Health System and CHRISTUS Health will immediately begin work to complete the final phase of due diligence, which includes negotiating the terms of a definitive agreement and beginning state and federal regulatory reviews. Both expect the process to be completed by early 2017.
According to the Longview News-Journal, Good Shepherd would bring roughly $400 million in annual revenue to the deal, while CHRISTUS would assume all of Good Shepherd's debt. No layoffs are expected among employees in good standing at Good Shepherd. JP Morgan acted as advisor to CHRISTUS in the deal.
Philip Betbeze is the senior leadership editor at HealthLeaders.