Atlantic had initially put the money-losing nonprofit Mountainside Hospital on the block in 2005, hiring Cain Brothers, a New York-based investment banking firm that specializes in medical properties, to find a buyer. Early discussions focused on the Saint Barnabas Health Care System as a potential buyer before Atlantic opted for Merit's bid.
Merit and Atlantic came to terms on the transaction in 2006, and the deal closed this week. The sale was subject to the approval of the State Department of Health, which signed off on it after Merit agreed to a clause that the hospital would be maintained as an acute care facility for at least 10 years. Local officials had expressed concerns that the facility was being acquired for its real estate value rather than as an operating hospital.
"We are grateful for the support the leaders and residents of the community have shown us," says Merit chairman and CEO Ty Wilburn, in a statement. "I want to thank the individuals across New Jersey who diligently helped shepherd this acquisition to completion."
Mountainside Hospital, which sits on this community's border with Montclair, will be operated on a for-profit basis, Merit officials say. The company has also named C. Barry Dykes, formerly of the Desert Regional Medical Center in Palm Springs, CA, as the facility's CEO. Company officials also say they will spend $20 million for capital improvements, including the addition of new office space.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.