Private equity firm to buy Summa Health for $485M
Ohio-based Summa Health confirms its acquisition by a private equity firm, nearly a year after the buyout was initially proposed.
According to an announcement, venture capital firm General Catalyst will purchase the 1,300-bed health system for $485 million. Once the deal is approved by regulators, Summa Health will operate under the banner of General Catalyst’s Health Assurance Transformation business (HATco), which includes a network of some 20 health systems.
HATco has pledged to invest $550 million in Summa Health over the next seven years to bolster routine operations and support technology investments. The sale will also wipe out the existing debt of Summa Health, which totals around $850 million.
It’s not entirely clear how business operations at Summa Health, a nonprofit, will change. However, in its announcement, the health system said it will “maintain its charity care policy, community benefit, and essential services” while focusing on growth and expansion.
“As part of HATCo, Summa Health will be better positioned to build upon our existing strengths and capabilities while also benefiting from new opportunities and technology. Our goals are to expand access to care and improve the experience for our patients, providers and staff,” Cliff Deveny, M.D., Summa Health President and CEO, said in the announcement.
Any remaining cash Summa Health has available after paying its creditors will be used to fund a new “separately governed community foundation” to make investments in the greater Akron, Ohio, area, the organization said. It also noted that HATCo is committed to making long-term investments in the community.
In addition to healthcare, General Catalyst’s portfolio includes investments in consumer technology, artificial intelligence, hospitality and defense.
HATCo and Summa Health are awaiting approval from the Federal Trade Commission, the Ohio Attorney General’s office and the Ohio Department of Insurance before the sale becomes official.
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