Foley Represents Integrity Healthcare & BlueMountain in Largest CA Nonprofit Hospital Deal
21 December 2015
Foley & Lardner LLP provided strategic legal counsel to clients BlueMountain Capital Management, LLC and Integrity Healthcare, LLC in connection with a transaction with Daughters of Charity Health System (DCHS), which is considered one of the largest and most complex nonprofit hospital transactions in California history.
The transaction involves the conversion of DCHS (named Verity Health System of California, Inc. after the closing) and its affiliates from nonprofit religious corporations to nonprofit public benefit corporations and appointment of an independent board to govern Verity. The transaction includes a 15-year management agreement under which Integrity Healthcare, LLC will provide comprehensive administrative and management services for Verity and provide executive officers for Verity, and a $100 million payment to Verity by Integrity Healthcare, LLC and two affiliates, in part as a contribution, and in part in exchange for the option to purchase the health system after 3 years. Certain funds managed by BlueMountain Capital, LLC also guaranteed $150 million of financing to support the health system’s operating needs and refinance certain outstanding commitments.
The deal will maintain the charitable purpose of the organization, ensuring access to critical health care services for over 800,000 low-income state residents currently serviced by the six inpatient health care facilities comprising the Verity health system.
“BlueMountain has provided DCHS with the opportunity to recapitalize its operations while continuing to serve the community in which it has operated for decades,” said Mark Waxman, lead partner on the deal. “This is the first time a deal in California has been structured in this way, and I expect we’ll continue to see an uptick in private equity investing in struggling nonprofit health systems going forward.”
The Foley team representing BlueMountain and Integrity Healthcare includes Partners Mark Waxman, Mark Schieble, Samuel Hoffman, Michael Bailey and Steven Gerenraich, Of Counsel Mark Neuberger, Senior Counsel Casey Fleming and Associates Hannah Zaitlin and Claire Marblestone.
The transaction involves the conversion of DCHS (named Verity Health System of California, Inc. after the closing) and its affiliates from nonprofit religious corporations to nonprofit public benefit corporations and appointment of an independent board to govern Verity. The transaction includes a 15-year management agreement under which Integrity Healthcare, LLC will provide comprehensive administrative and management services for Verity and provide executive officers for Verity, and a $100 million payment to Verity by Integrity Healthcare, LLC and two affiliates, in part as a contribution, and in part in exchange for the option to purchase the health system after 3 years. Certain funds managed by BlueMountain Capital, LLC also guaranteed $150 million of financing to support the health system’s operating needs and refinance certain outstanding commitments.
The deal will maintain the charitable purpose of the organization, ensuring access to critical health care services for over 800,000 low-income state residents currently serviced by the six inpatient health care facilities comprising the Verity health system.
“BlueMountain has provided DCHS with the opportunity to recapitalize its operations while continuing to serve the community in which it has operated for decades,” said Mark Waxman, lead partner on the deal. “This is the first time a deal in California has been structured in this way, and I expect we’ll continue to see an uptick in private equity investing in struggling nonprofit health systems going forward.”
The Foley team representing BlueMountain and Integrity Healthcare includes Partners Mark Waxman, Mark Schieble, Samuel Hoffman, Michael Bailey and Steven Gerenraich, Of Counsel Mark Neuberger, Senior Counsel Casey Fleming and Associates Hannah Zaitlin and Claire Marblestone.
People
Related News
06 May 2024
Press Releases
Foley Announces 2024 50-State Telehealth Survey
Foley & Lardner LLP today released the third edition of its 50-State Survey of Telehealth Insurance Laws, which provides a detailed report on each state’s telehealth commercial insurance coverage and payment/reimbursement laws and compares these laws before and after the Public Health Emergency (PHE).
01 May 2024
Press Releases
Foley Continues to Grow Its East Coast Transactions Practice, Adds M&A Partner Jeff Symons in New York
Foley & Lardner LLP announced today that it has strengthened its Transactions Practice with the addition of M&A partner Jeff Symons in New York.
30 April 2024
Press Releases
Foley Ventures Announces Fifth Fund to Invest in Firm Clients
Foley Ventures is pleased to announce Foley Ventures V, its latest venture fund launched in April 2024 to invest in companies and debt and equity fund clients.