Prime Healthcare Services has won in its bid for the financially struggling Saint Michael's Medical Center in Newark, New Jersey, according to Saint Michael's Board of Directors.
Prime will pay $62.2 million, or $13 million in excess of the initial bid submitted of $49 million, for the Trinity Health subsidiary, the board said.
It will invest $50 million in capital improvements, which is $25 million more than initially agreed upon, to continue to modernize facilities and support technology, equipment and services; and to retain substantially all employees and physicians, according to the Asset Purchase Agreement that is expected to be presented to the Bankruptcy Court on November 12.
The agreement also includes continued inpatient and outpatient services; charity care; and honoring the Ethical and Religious Directives for Catholic Health Care.
Saint Michael's filed for Chapter 11 bankruptcy and a competitive auction was held November 5. The hospital board reviewed the two bidders -- Prime and Prospect Medical Holdings -- and chose Prime as the one that could best assure the long-term viability of Saint Michael's, it said.
Prime came to the table with an offer three years ago, according to Saint Michael's President and CEO David Ricci.
"Today, they remain a committed partner and have renewed that commitment by paying $62.2 million and improving several material terms of their asset purchase agreement," he said. "Most critically, the Prime sale will ensure that Saint Michael's has a vibrant future, continues to serve the community and preserves the more than 1,400 jobs of its dedicated staff."