Way back in December 2012, Prime Healthcare Services signed a letter of intent to acquire Trinity Health subsidiary, St. Michael’s Medical Center, then a 147-bed acute care hospital (down from 259 beds in 2010), in Newark, New Jersey. The parties signed a definitive agreement in February 2013. As usual, getting regulatory approval from the New Jersey Department of Health and the State Attorney General took a while. Too long, in fact. In April 2015, with the deal still not approved, a Navigant Consulting report suggested several healthcare facilities in the city be shut down or consolidated, which caused several campaigns and protests on St. Michael’s behalf. On August 10, 2015, St. Michael’s voluntarily filed for reorganization under Chapter 11, as “a prudent and necessary action to preserve the medical center’s financial viability and the jobs of more than 1,4oo employees,” among other things.
Finally, on November 12, 2015, St. Michael’s board chose Prime Healthcare as the winning bidder. Prime will pay $62.2 milion, a $13 million bump from its original $49 million bid. Given the hospital’s finances, last filed on December 31, 2012, that makes for a revenue multiple of 0.3x, and a price per bed of $229,520. All’s well that ends well.