Beth Israel Deaconess Medical Center’s goal of acquiring Jordan Hospital was recently evaluated in an open public hearing in Kingston. Jordan employees who attended the hearing sought promises that the proposed business sale wouldn’t lead to firings, but they also expressed their hopes that the proposed merger would improve the budget situation at the smaller local care facility.
Officials stated that the deal would allow Jordan Hospital to provide higher-quality care to its patients and stave off ensuing fiscal ruin. Jordan’s chief executive officer admitted that the facility’s leadership staff had solicited proposals for mergers during the previous year after receiving internal and independent assessments stating that the hospital’s financial situation was dire.
If the transaction is consummated, Boston-based Beth Israel would commit to a $10 million capital infusion over the first five years and maintain normal capital investments. Should the Kingston facility’s performance fail to improve, however, the agreement would allow Beth Israel to back out after the initial five-year period. Some union leaders who spoke at the meeting claimed that the deal wasn’t as favorable as it seemed, but the proposal was backed by most of the people in attendance. A formal vote on the acquisition is scheduled for October 16.
Business combinations that involve numerous employees or facilities that serve entire communities can be complex. Applicable laws and industry regulations may dictate that deals have to be structured with regulatory approval in mind. An attorney with experience in mergers and acquisitions may be able to help companies contemplating these types of transactions draft agreements that let them satisfy their profitability goals and address the concerns expressed by employees, communities and regulatory agencies.
Source: Wicked Local Kingston, “Proposed Jordan Hospital acquisition gets backing at state hearing “, Rich Harbert, September 18, 2013