Cooper files suit to recoup $15M after walking out on merger plans
- Cooper University Health Care has filed a lawsuit this week against Trinity Health's Maxis Health System division, The Inquirer reported.
- Cooper is seeking to recoup $15 million in escrow after it walked away from its deal to acquire the two-hospital Lourdes Health System and St. Francis Medical Center from Maxis. A lawyer for Trinity told The Inquirer the organization does not agree with Cooper's reasoning to cancel the merger plans.
- The Camden, N.J.-based Cooper announced the merger plans in August but stated it would no longer pursue the acquisition last week.
In 2017, providers continued to consolidate to build up economies of scale and leverage regional negotiating power. In the last month, a wave of vertical integration deals — including the $69 billion CVS-Aetna deal and partial acquisition of Kindred by Humana — has set the stage for a number of copycat deals and increased federal scrutiny of mergers in the space.
With many organizations buying into the consolidation movement, a deal reversal raises some eyebrows.
Since the Cooper deal was initiated, the organization stated it undertook due diligence to review compliance, legal, regulatory and operational issues. Cooper called off the merger as a result of the process.
Cooper CEO Adrienne Kirby stated, “Our team has invested thousands of hours and millions of dollars in reviewing the proposed transaction. Based upon this review, unfortunately, we will not be able to consummate the contemplated transaction. We are all disappointed, but did not make this decision lightly.”
Trinity will now have to seek another buyer for the New Jersey properties. It may not have a long wait; New Jersey has seen a fair amount of M&A activity this year. Kennedy Health and Jefferson Health announced a merger and RWJBarnabas Health and Rutgers University announced a partnership to create a new academic healthcare system.
Follow Jeff Byers on Twitter