Verity Health Systems has agreed to sell four hospitals, including two in Los Angeles, to KPC Group for $610 million.
The deal includes the 163-year-old St. Vincent Medical Center in Westlake and the 74-year-old St. Francis Medical Center in Lynwood, according to the Los Angeles Business Journal. On Friday, an asset purchase agreement was made for the four hospitals, but is subject to a higher bid at auction.
If the deal is completed, the L.A. hospitals would account for the majority of the total. St. Francis property would sell for $420 million and St. Vincent for $120 million, according to the report. The other two hospitals in Northern California are Seton Medical Center and Seton Coastside.
KPC Group operates medical facilities in Southern California, owns some retail real estate assets and has development plans for medical centers and residential projects.
The sale follows El Segundo-based Verity Health’s Chapter 11 bankruptcy proceedings last year. Verity Health was formed in 2015 when BlueMountain Capital purchased the four hospitals and two others in 2015 from Daughters of Charity Health System, a Catholic nonprofit.
In 2017, billionaire Dr. Patrick Soon-Shiong — whow now owns the Los Angeles Times — purchased a majority stake in Verity with plans to modernize the network. That didn’t turn things around for the company, and Verity Health declared bankruptcy in August 2018.
An auction could take place in April if a bankruptcy court approves KPC Group’s offer. The winning bid is subject to a separate approval by the court. [LABJ] — Dennis Lynch