PROVIDENCE – Following a three-hour hearing today, Superior Court Judge Michael A. Silverstein gave his conditional approval of the asset purchase agreement for the sale of Landmark Medical Center to Prime Healthcare Services in Ontario, Calif.
The judge’s decision allows Prime Healthcare to move forward with the deal while working out an addendum to the asset purchase agreement that will include specific numbers and schedules, including details of a management advisory agreement. The addendum is expected to be finished in two weeks, according to Silverstein, who instructed the lawyers to prepare the necessary documents as soon as possible.
Once the addendum is finalized, Prime Healthcare said it expected to submit its application under the state Hospital Conversions Act within 45 days. The tentative closing date, following the subsequent 120-day review of the deal by state regulators, is set for May 31, 2013.
The total sales price is $43.25 million, according Michael J. Sarrau, vice president and general counsel for Prime Healthcare, who testified under and answered concerns about billing practices.
Within that amount, there is $30 million for capital improvements and $4.4 million to pay back a loan to Steward Health Care, the previous Landmark suitor who backed out of the deal in September, according to Sarrau, speaking after the hearing.
Sarrau said that Prime Healthcare would be investing an additional $19 million in physician recruitment and retention.
A tentative collective bargaining agreement was reached late Monday evening between Prime Healthcare and United Nurses & Allied Professionals, the union representing workers at Landmark.
The only condition of the deal related to Blue Cross & Blue Shield of Rhode Island is that the health insurer will keep the current contract reimbursement numbers through the completion of the sale of Landmark and “negotiate in good faith” in regard to a future contract, according to Sarrau.
Since its initial bid for Landmark in 2011, Prime Healthcare has acquired hospitals in Texas and Pennsylvania, in a bid to expand its geographic reach outside of California. Sarrau said Prime Health had been “frustrated by the process” in 2011.
Sarrau also said that Prime Healthcare would also consider expansion in the Rhode Island market. “Our goal is to develop a regional cluster in the Northeast,” he said.
In terms of the existing conflict regarding Landmark’s nonpayment of state hospital licensing fees of more than $5 million, Sarrau said that he was “unfamiliar” with the issue.
In regard to the payment schedule of the money owed to Blue Cross, Sarrau said that he expected that the ongoing weekly payments of $250,000 would retire the debt, now said to be about $3 million, according to Blue Cross.
In his presentation to the court asking instructions, Savage revealed that he had been in negotiations with Care New England before reaching agreement with Prime Healthcare, but that Care New England, after doing some due diligence, decided against pursuing the deal.
Savage also said that he had had conversations with Lifespan regarding a potential deal, but nothing developed within the necessary time frame.
Join PBN for the best networking event and party of the winter - January 15, 2015 - the Book of Lists Party at the Providence Public Library. Reserve your spot by December 31st and get a holiday gift from PBN!
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.