KentuckyOne Health announced on Tuesday that it is near a deal to sell Jewish Hospital and its Louisville assets to BlueMountain Capital Management, a New York-based hedge fund.
Last week, Insider Louisville first reported that BlueMountain was the prime suitor for Jewish Hospital, as KentuckyOne only indicated that it had “narrowed the list of potential owners.”
KentuckyOne and its parent company, Catholic Health Initiatives, first announced their intention to sell Jewish Hospital and other Louisville facilities in May, citing “significant challenges” in the health care industry.
The announcement Tuesday morning stated that KentuckyOne and CHI had “entered into exclusive negotiations” with the BlueMountain hedge fund “to explore a potential strategic investment which may include the sale of previously identified KentuckyOne Health hospitals and health care operations to BlueMountain, with a focus on ensuring continued access to quality health care for individuals in Louisville and across Kentucky.”
The release added that “the exclusive negotiation process” had just begun and would continue over the coming months, and “any transaction would be subject to due diligence, execution of a final agreement, regulatory approvals and other customary terms and conditions.”
“Continuing the legacy of high-quality health care, world-renowned innovation and compassion for this community is very important for KentuckyOne Health,” stated Richard Schultz, vice chair of the KentuckyOne Health board of directors, in the press release.
“Following in-depth review of plans and proposals, we believe BlueMountain Capital Management has the potential to build upon this legacy going forward,” Schultz added. “They have the proven track-record in delivering on investments in quality care and operational performance. We look forward to continuing negotiations with the goal of reaching a definitive agreement.”
University of Louisville Interim President Greg Postel said he welcomed the news. The university has close ties with the health system and continues to use Jewish hospital as one of its teaching hospitals.
“We believe that it is important that the people of Louisville and the region have access to high quality health care close to their homes, whether that be downtown or in the suburbs,” Postel said in an emailed statement. “We look forward to working with the leaders of BlueMountain Capital Management related to the educational and health care programs of the University of Louisville that are based at local KentuckyOne facilities.”
KentuckyOne and UofL this year ended a joint operating agreement signed in 2012, under which the health care system was managing UofL Hospital and the James Graham Brown Cancer Center.
As IL reported last week, in 2015 BlueMountain took over management of the Daughters of Charity Health System, a struggling nonprofit Catholic hospital system. That deal was approved by California Attorney General Kamala Harris, who required BlueMountain to agree to conditions such as keeping the system nonprofit for at least three years and “maintaining the historic level of charity care.”
BlueMountain is also a joint venture partner of BM Eagle Holdings, which recently purchased Louisville-based Kindred Healthcare’s 89 skilled nursing facilities for $910 million.
This post has been updated.