Team of Steward Doctors Acquire Controlling Stake of Steward Health Care
System becomes the largest physician-owned health care company in the United States
DALLAS, TEXAS – Steward Health Care today announced that it has structured a recapitalization transaction with Cerberus Capital Management (together with its affiliates, “Cerberus”) that transfers controlling interest of the company to a management group of Steward Health Care physicians led by the Company’s CEO and founder, Dr. Ralph de la Torre. With the transaction, Steward Health Care becomes the largest physician-owned and operated health care system in the United States.
“This is a transformational moment for the health care industry, with new realities in a COVID-19 world that must be addressed with an equally transformational, patient-first approach,” said Dr. de la Torre, who will continue to serve as the Company’s Chairman and CEO.
“The COVID-19 global pandemic has exposed serious deficiencies in the world’s health care systems, with a disproportionate impact on underserved communities and populations,” continued Dr. de la Torre. “We believe that future health care management must completely integrate long-term clinical needs with investments. As physicians first, we will focus on creating structures and timelines that meet the long-term needs of our communities and the short-term needs of our patients.”
As part of the recapitalization transaction, no additional leverage was added to the Company’s balance sheet and Cerberus’ controlling interest was exchanged for a convertible note. The management group of Steward Health Care physicians will control 90 percent of the Company and Medical Properties Trust will maintain its previous 10 percent stake. The recapitalization transaction improves the Company’s balance sheet and gives Steward Health Care financial strength to successfully navigate the COVID-19 pandemic
Steward Health Care was founded more than a decade ago. In 2010, Cerberus invested in Steward Health Care to acquire the original six hospitals of the Caritas Christi system in Massachusetts. Today, Steward Health Care operates 35 hospitals in nine states with more than six million annual patient encounters.
“For nearly a decade, we have partnered with Steward Health Care to build an industry-leading company that provides access to affordable, high-quality, community-based care across the United States,” said Brett Ingersoll, Senior Managing Director and Chairman of the Private Equity Investment Committee at Cerberus. “We believe this transaction will ensure that Steward Health Care’s transformative, accountable care model will continue to drive innovation as a physician-owned and integrated health care system.”
Dr. de la Torre commented, “I want to thank Cerberus for their support in growing Steward Health Care into a national system caring for millions of patients around the country. We look forward to achieving the next level of patient-centric care, through a doctor-owned structure that unites all aspects of care delivery and prevention in ways never before contemplated.”
Citi is acting as sole financial advisor to Steward Health Care and, as administrative agent on its asset-based credit facility, led the amendment in connection with the transaction.
Additional information is available at www.steward.org