StoneBridge Healthcare, a hospital turnaround firm, is looking to enter a management contract with Delaware-based WoodBridge, a nonprofit organization, to acquire West Reading, Pa.-based Tower Health for $706 million, the Philadelphia Business Journal reported Dec.12.
WoodBridge, a sister organization to StoneBridge, was expected to share a nonbinding agreement in principle with Tower Health on Dec. 12, which includes the intent to purchase the system's assets, the publication reported.
An initial cash payment of $550 million, including the assumption of finance leases with liabilities of $156 million, and a commitment of hiring nearly all the system's 11,000 employees are featured in the proposed deal.
Tower Health operates Reading Hospital, Pottstown Hospital and Phoenixville Hospital. St. Christopher's Hospital for Children in Philadelphia is also under the system in partnership with Drexel University.
If all goes well, the plan would involve StoneBridge negotiating a management agreement with WoodBridge, Joshua Nemzoff, founder and CEO of StoneBridge, told the Journal. However, Mr. Nemzoff said WoodBridge is only interested in acquiring the Reading, Pottstown and Phoenixville hospitals.
This is not the first time that StoneBridge has attempted to acquire the system. Last November, the firm offered Tower Health $675 million, which was turned down. StoneBridge, in partnership with Allentown, Pa.-based Lehigh Valley Health Network, also made two conditional offers in 2021 to acquire the system's assets for $600 million, which were also declined.
Formed in 2020, StoneBridge's mission is to purchase and turn around acute care hospitals that are in significant economic distress. The firm currently does not own or operate any hospitals. Like StoneBridge, WoodBridge also hasn't completed hospital deals, and will have its own separate board of directors, the publication reported.
Tower Health declined to provide Becker's with a comment. Becker's has also reached out to StoneBridge Health regarding the potential acquisition.