The Dallas-based physician-owned company has been owned by Cerberus for a decade.
Steward Health Care has reached an agreement to buy back control of the company from Cerberus Capital Management, L.P., a New York-based private equity firm.
Cerberus agreed Tuesday to sell control of the Dallas-based physician-owned company to a group of Steward physicians led by CEO Dr. Ralph de la Torre.
"This is a transformational moment for the healthcare industry, with new realities in a COVID-19 world that must be addressed with an equally transformational, patient-first approach,” de la Torre said in a statement. "The COVID-19 global pandemic has exposed serious deficiencies in the world’s healthcare systems, with a disproportionate impact on underserved communities and populations. We believe that future healthcare management must completely integrate long-term clinical needs with investments. As physicians first, we will focus on creating structures and timelines that meet the long-term needs of our communities and the short-term needs of our patients."
Steward, which has been owned by Cerberus for a decade, manages 35 community hospitals across nine states.
"For nearly a decade, we have partnered with Steward Health Care to build an industry-leading company that provides access to affordable, high-quality, community-based care across the United States,” Brett Ingersoll, senior managing director and chairman of the private equity investment committee at Cerberus, said in a statement. "We believe this transaction will ensure that Steward Health Care’s transformative, accountable care model will continue to drive innovation as a physician-owned and integrated healthcare system."
The move comes amid an economic downturn spurred by the coronavirus disease 2019 (COVID-19) outbreak.
In late March, Steward issued a statement to WBUR that described the impact of the coronavirus pandemic on the company as a "seismic financial shock."
Additionally, according to a report released by the Massachusetts Center for Health Information and Analysis last September, Steward had the lowest total margin and operating margin in fiscal year 2018 among 11 multi-acute health systems.
Amid the outbreak, Steward has reportedly been eyeing a deal with St. Luke’s University Health Network to sell Easton Hospital, an acute care facility based in Wilson, Pennsylvania.
However, there are concerns that if the transaction falls and the hospital closes its doors on June 30 that nearly 700 people will lose their jobs.
Editor's note: This story has been updated with commentary from Steward Health Care and Cerberus Capital Management, L.P.
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.