Overview of the Deal
Acquirer: Orlando Health
Target: Steward Health Care’s East Central Florida Operations
Total Transaction Size: $439 million
Offer Details: Acquisition of three hospitals and associated physician practices
Announcement Date: August 14, 2024
Completion Date: October 24, 2024
Target Advisors: Not publicly disclosed
Acquirer Advisors: Not publicly disclosed
On August 14, 2024, Orlando Health announced a binding asset purchase agreement to acquire Steward Health Care’s East Central Florida operations for $439 million. This acquisition includes three hospitals:
- Rockledge Regional Medical Center (119 beds)
- Melbourne Regional Medical Center (119 beds)
- Sebastian River Medical Center (178 beds)
The transaction also encompasses the associated Steward Medical Group practices.
The U.S. Bankruptcy Court approved Orlando Health’s bid on September 10, 2024, as part of Steward Health Care’s Chapter 11 bankruptcy proceedings.
The acquisition was finalized on October 24, 2024, with Orlando Health assuming ownership of the hospitals and related physician practices.
Company Details (Acquirer – Orlando Health)
Orlando Health is a private, not-for-profit healthcare organization serving the southeastern United States.
- Founded: 1918
- Headquarters: Orlando, Florida, USA
- CEO: David Strong
- Services: Comprehensive medical services, including hospitals, specialty institutes, and outpatient facilities
- Recent Acquisitions:
- Brookwood Baptist Health: Acquired an 80% stake in October 2024, expanding operations into Alabama.
Company Details (Target – Steward Health Care’s East Central Florida Operations)
Steward Health Care’s East Central Florida operations comprised three hospitals and associated medical practices:
- Rockledge Regional Medical Center: 119-bed hospital in Rockledge, Florida
- Melbourne Regional Medical Center: 119-bed hospital in Melbourne, Florida
- Sebastian River Medical Center: 178-bed hospital in Sebastian, Florida
These facilities provided a range of medical services to their respective communities.
Projections and Assumptions
Short-Term Consequences
- Operational Integration: Orlando Health will integrate the acquired hospitals and physician practices into its existing network, aiming to enhance healthcare services in East Central Florida.
- Financial Impact: The $439 million acquisition is part of Orlando Health’s strategic expansion, supported by a $1.2 billion bond issuance to finance recent acquisitions and future capital projects.
Long-Term Upsides
- Regional Growth: The acquisition strengthens Orlando Health’s presence in East Central Florida, providing opportunities for service expansion and improved patient care.
- Enhanced Services: Integrating these facilities allows Orlando Health to offer a broader range of medical services, leveraging its resources and expertise to benefit the local communities.
Risks and Uncertainties
- Integration Challenges: Merging operations, systems, and cultures from different organizations may present challenges that require effective change management strategies.
- Regulatory Compliance: Ensuring adherence to healthcare regulations and maintaining quality standards during the transition period is crucial to avoid potential legal and operational issues.
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