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Steward would pay $21m for hospitals

By Robert Weisman
Globe Staff / December 11, 2010

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The proposed purchase of Merrimack Valley Hospital in Haverhill and Nashoba Valley Medical Center in Ayer now has a price tag.

In a filing made public by the state Department of Public Health yesterday, buyer Steward Health Care System LLC of Boston said it agreed to pay a total of $21 million for the two community hospitals.

Steward, the holding company created by the new owner of the Caritas Christi Health Care hospitals in eastern Massachusetts, also agreed to bankroll $19 million in capital improvements at the Merrimack Valley and Nashoba Valley hospitals. That brings the value of the deal to about $40 million. When the transaction was unveiled Thursday, the parties, both of which are privately held, did not disclose the purchase price or other financial terms.

The deal is subject to the approval of the state Public Health Council, which must issue new licenses any time a Massachusetts hospital changes hands.

The hospitals in Haverhill and Ayer are currently owned by Essent Healthcare, based in Nashville.

Steward’s filing said its ownership would let the two hospitals continue as providers of “financially sustainable, lower-cost, high-quality hospital and other health care services to the communities.’’

Merrimack Valley and Nashoba Valley would be the first secular hospitals in Steward’s chain. Under Cerberus Capital Management, a New York private equity firm, it owns six Catholic hospitals: St. Elizabeth’s Medical Center in Brighton, Carney Hospital in Dorchester, Good Samaritan Medical Center in Brockton, Norwood Hospital, Saint Anne’s Hospital in Fall River, and Holy Family Hospital in Methuen.

The purchase of Merrimack Valley and Nashoba Valley would also put six of the state’s eight for-profit hospitals under the umbrella of Steward, which is seeking to expand its community hospital franchise.

Robert Weisman can be reached at weisman@globe.com.