Virtua Health has a preliminary agreement to acquire Lourdes Health Systems, which includes Our Lady of Lourdes Medical Center in Camden and Lourdes Medical Center of Burlington County in Willingboro, Virtua said Thursday.
The announcement comes about three months after Cooper University Health Care backed out of its nonbinding letter of intent to acquire Lourdes and St. Francis Medical Center in Trenton. Trinity Health, of Livonia, Mich., one of the nation's largest nonprofit health systems, owns both Lourdes and St. Frances.
Virtua said in an emailed statement: "The parties hope that they will be able to complete this transaction, which has the potential to achieve great benefits for health care in South Jersey. Further review is underway; there is no final agreement."
Reginald Blaber, president of Lourdes, told staff in an email that he was happy about the letter of intent, but cautioned that talks with Lourdes were in the early stages. "Given our previous experience, you can imagine why we all wish to be more cautious in our approach this time around," Blaber's note said.
Virtua had been in the mix as a potential acquirer of the Trinity properties last summer (and preferred by some at Lourdes) before the preliminary deal with Cooper was announced on Aug. 31.
Under Cooper's preliminary agreement with Trinity, Cooper was going to pay $150 million to Trinity, which Trinity was going to use to pay debts and other obligations of Lourdes and St. Francis, according to a document filed in court. Cooper also agreed to spend $135.5 million on capital expenditures at the two hospitals in its first five years of ownership.
Cooper and Trinity (through a subsidiary, Maxis Health System) are now in litigation over Cooper's demand that Trinity return Cooper's $15 million deposit. During due diligence, Cooper said it found three problems that would have put it at risk financially. Only one of them had a dollar figure attached to it. That was "an uninsured potential exposure in excess of $20 million" from unresolved litigation with real estate developer Joseph Gonnelli.