Saint Michael's Board of Directors Names Prime Healthcare Services as Successful Bidder
Nov 10, 2015
Newark, NJ—The Saint Michael's Medical Center Board of Directors named Prime Healthcare Services as the successful bidder for the medical center. After a November 5 competitive auction, the two bidders—Prime Healthcare Services and Prospect Medical Holdings—convened today to present their respective credentials and vision to the Board before it carefully deliberated and made its selection.
After careful consideration, and with the endorsement of the Creditor’s Committee (per bankruptcy protocol), the Board selected Prime as the preferred owner for Saint Michael's to continue to serve the Greater Newark community. As a result of the competitive auction process, Prime will pay $62.2 million or $13 million in excess of the initial bid submitted ($49 million), as well as agreeing to modify significant deal terms that substantially benefit Saint Michael’s.
"Saint Michael's is essential to the Greater Newark community, and the enthusiasm and commitment demonstrated by these quality bidders is testament to the necessity for this community institution," said David Ricci, president and CEO. "We look forward to a bright future under Prime's leadership and thank Prospect Medical Holdings for its valued bid."
The Board assessed the bids to determine which offer is in the best interest of all stakeholders including to assure the long-term viability of Saint Michael's which both bidders fully endorsed. The terms of the revised Asset Purchase Agreement to be submitted to the court will include continued current inpatient and outpatient services; charity care consistent with current policies and levels; honoring the Ethical and Religious Directives for Catholic Health Care; invest $50 million in capital improvements ($25 million more than initially agreed upon) to continue to modernize facilities and support strategic needs in technology, equipment and services; and to retain substantially all employees and physicians in good standing when the sale is finalized.
"Almost three years ago, Prime came to the table with the best offer to sustain the medical center," said Ricci. "Today, they remain a committed partner and have renewed that commitment by paying $62.2m and improving several material terms of their asset purchase agreement. Most critically, the Prime sale will ensure that Saint Michael's has a vibrant future, continues to serve the community and preserves the more than 1,400 jobs of its dedicated staff."
“The bankruptcy auction process brought out the best in these two high quality bidders," said Michael D. Sirota, counsel to Saint Michael’s. "The Board considered every aspect of the offers and meticulously exercised its fiduciary duty in selecting Prime. The Hospital is looking forward to presenting Prime's bid to the Bankruptcy Court for approval on Thursday and hopes that, given this rigorous sale process, the State will quickly issue all regulatory approvals.”
A hearing to approve the selected buyer is scheduled for November 12, with U.S. Bankruptcy Judge Vincent Papalia.