JEANNETTE, PA-Greensburg-based Excela Health has signed an asset purchase agreement to acquire the financially troubled Mercy Jeannette Hospital. The agreement followed discussions with Catholic Health East and the Sisters of Charity of Seton Hill.

Catholic Health East is a Newtown Square-based national multi-institution Catholic health system that owns and operates facilities co-sponsored by religious congregations, and Sisters of Charity of Seton Hill is this facility’s sponsor. The 148-bed hospital faces a projected $6.5-million loss from operations this year, and both organizations had agreed on the need for a new strategic partner and direction.

An Excela spokeswoman tells the acquisition cost is approximately $16 million. “Other options were explored,” she says before Excela became “the invited buyer to the table.” Excela plans to invest $10 million in upgrades to the facility over the next five years.

As a part of the agreement, Mercy Jeannette will become a campus of Excela’s nearby Westmoreland Hospital and be renamed Excela Health Westmoreland Hospital at Jeannette. Since its inception in 2004, Excela has acquired and brought financial stability to LaTrobe Hospital in LaTrobe and Frick Hospital in Mount Pleasant, as well as to Westmoreland, which is located in Greensburg.

“Bringing the Jeannette campus into Excela Health’s network of care reflects our organization’s recently unveiled strategic plan, a key element of which is growth,” says David Gallatin, Excela’s CEO, in a statement. Over the next five years, he says the company “will pursue growth opportunities throughout the region to preserve access to health care services in our communities while also strengthening the quality of care.”

The closing is expected to take place within six months, following a review by the state attorney general and approval of the Westmoreland County Orphan’s Court and canonical approval from the Diocese of Greensburg and the Vatican. Excela expects to offer employment to most Mercy Jeannette employees, offer training where appropriate, and invite its physicians to apply for privileges at any of its hospitals.

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