Steward sells physician group to private equity firm for $245M
As part of its ongoing bankruptcy selloff, Steward Health Care is set to sell its physician group, Stewardship Health, to Rural Healthcare Group, owned by private equity firm Kinderhook Industries.
The physician group is made up of 3,500 primary and specialty care doctors, serving patients nationwide. As part of the deal, those physicians will move from health systems owned by Steward to new facilities.
Kinderhook has set up Brady Health Buyer, a company that will facilitate the transaction. In its announcement, Steward did not specify a sale amount. However, reporters at the Boston Globe said the pricetag was $245 million.
“Kinderhook has over 20 years of experience investing in mid-sized health care businesses that serve the nations’ most vulnerable populations. Kinderhook’s investments are focused on protecting access to high-quality healthcare in communities that are truly underserved,” Mark Rich, president of Steward, said in the announcement. “Rural Healthcare Group is a well-respected group of healthcare professionals that specifically focuses on underserved and underinsured areas. We are confident that Stewardship Health will continue its stellar treatment of the patient population as a result of this transaction.”
The sale will not be final until it's approved by the bankruptcy court and regulators. Steward was previously set to sell its physician group to Optum and UnitedHealth Group, but the deal fell through, according to the Boston Globe.
Steward filed for bankruptcy in May and has been seeking buyers for all of its 31 hospitals. The sale of six of its Massachusetts hospitals has been delayed but could be finalized during a Friday court hearing in Texas.
Steward has been at the center of scandals related to its business operations pre-bankruptcy, including allegations it spent millions spying on critics. The DOJ is also investigating the organization over its ties to foreign governments.
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