Christiana Care Health System, Inc. (ChristianaCare) and Prospect Medical Holdings, Inc. (Prospect) today announced the signing of a Letter of Intent (LOI) for ChristianaCare to acquire Crozer Health from Prospect.
Under the LOI, ChristianaCare is to purchase the assets and operations associated with the following Prospect hospitals:
- Crozer-Chester Medical Center in Upland, Pennsylvania, with 499 certified beds.
- Delaware County Memorial Hospital in Drexel Hill, Pennsylvania, with 215 certified beds.
- Springfield Hospital in Springfield, Pennsylvania.
- Taylor Hospital in Ridley Park, Pennsylvania.
The agreement also includes the hospitals’ related businesses, real estate assets, Crozer Health Medical Group and the associated assets, ambulatory centers, medical office buildings, physician clinics and ancillary outpatient services.
While the executed LOI includes several important terms, the parties will engage in further due diligence and negotiation of a definitive agreement. Definitive agreement execution is targeted for the second quarter of 2022 with the potential for closing to occur in the second half of 2022. The agreement is subject to customary regulatory approvals.
Upon closing, ChristianaCare will return Crozer Health, with its approximately 4,000 employees, to nonprofit status as part of ChristianaCare. Crozer Health currently operates as a for-profit entity.
The related real estate assets of the Prospect hospitals are to be released from the existing master lease agreement between the real estate owner and Prospect.
“The pandemic has demonstrated the vital importance of working together to meet the clinical needs of the communities we serve,” said Kevin M. Spiegel, FACHE, CEO of Crozer Health. “We are excited by the potential to join these two great organizations so that we can continue to provide the high-quality, accessible care that our communities – Delaware County and beyond – rely on.”
“ChristianaCare and Crozer Health have been serving the people of Northern Delaware, Southeast Pennsylvania and parts of Maryland and New Jersey as neighbors for many years,” said Janice E. Nevin, M.D., MPH, ChristianaCare president and CEO. “We welcome this opportunity to explore a closer relationship with an organization that shares our commitment to value and service to the community.”
ChristianaCare and Crozer Health share similar commitments to value and population health, as well as complementary strengths. For example:
- Both organizations have vibrant graduate medical education programs that are important for the region’s ability to attract and retain top new, talented physicians, especially primary care providers.
- Both organizations operate sophisticated, high-quality trauma programs that serve the greater region. ChristianaCare includes the only Level I trauma center for adults and children between Philadelphia and Baltimore. Crozer Health includes a Level II trauma center and the Nathan Speare Regional Burn Treatment Center, which serves as the regional burn center for Delaware and surrounding areas.
Morgan Stanley & Co. LLC is serving as exclusive financial advisor to Prospect Medical Holdings on this transaction, and Sheppard, Mullin, Richter & Hampton LLP is serving as its legal counsel.
J.P. Morgan is serving as exclusive financial advisor to ChristianaCare, and Buchanan Ingersoll & Rooney PC is serving as its legal counsel.