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Steward secures $1.25B investment to fund expansion, pay off debt

Steward Health Care System has secured $1.25 billion from real estate investment firm Medical Properties Trust that will allow the Boston-based system to expand nationally and pay off debt.

Under the definitive agreement, Birmingham, Ala.-based MPT will pay $1.2 billion for Steward's nine hospital properties and $50 million for an equity stake in the company. Steward will lease back the hospital properties from MPT.

The investment will allow Steward to return the original investment Cerberus Capital Management made in the health system in November 2010. It will also help Steward expand its footprint, said Ralph de la Torre, MD, founder, chairman and CEO of Steward.

"The Medical Properties Trust investment will provide Steward a second source of capital funding. This ensures Steward will continue to provide high quality healthcare at an affordable cost in New England, and enables us to grow our proven quality model nationally," he said. "We believe this investment is a strong validation of our business model and an endorsement of our ability to scale nationally."

The transaction was officially completed on Oct. 3.

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