Dive Brief:
- Ascension, the nation's largest Catholic healthcare system, along with TowerBrook Capital Partners, are buying $200 million of Accretive convertible preferred stock, which is convertible into shares of Accretive common stock at $2.50 per share.
- The preferred stock constitutes close to 44% of Accretive's outstanding shares. The transaction is expected to be completed in the first quarter of 2016.
- The investment is part of a long-term strategic partnership, which revises and expands their existing services agreement for a 10-year term.
Dive Insight:
Accretive Health will remain a public company and will be Ascension's sole hospital revenue cycle provider for the 10-year term.
Ascension is to add more than $8 billion in new net patient revenue (NPR) to Accretive over the next several years, a 47% increase over Accretive's current NPR; after transitioning Ascension's incremental NPR. Accretive is expected to manage approximately $25 billion in NPR plus organic growth and will handle all physician advisory services for Ascension's 129-hospital system.
The deal also required Accretive to make a meaningful effort to be re-listed on a major stock exchange, according to Modern Healthcare. The company was delisted in March 2014 after delays while restating financial results. Shares must trade at a $4 minimum to be listed on the NYSE.
Dr. Emad Rizk, president and CEO of Accretive Health, said, "Ascension has been a valued partner of Accretive Health for many years, and we are very excited to have the opportunity to deepen and extend our strategic alliance and expand Accretive's business substantially."