Sale of 3 Florida hospitals is approved

Orlando Health has secured the approval to acquire three Florida hospitals from Steward Health Care.

Orlando Health has received approval from a federal bankruptcy judge to acquire three Florida hospitals from Steward Health Care.

A federal bankruptcy judge has signed off on Orlando Health’s plans to buy the three facilities in a $439 million deal.

Under the deal, Orlando Health will acquire the Steward hospitals on Florida’s Space Coast: Rockledge Regional Medical Center, Melbourne Regional Medical Center, and Sebastian River Medical Center. Orlando Health will also acquire the hospitals’ associated medical practices.

When it disclosed its plans to acquire the facilities, Orlando Health said it plans to offer improved healthcare services in the hospitals. Bill Kallus, Orlando Health’s public affairs and media relations manager, pointed to the system’s track record.

“Orlando Health is looking forward to beginning a new era in East Central Florida with these three hospitals,” Kallus wrote in an email to Chief Healthcare Executive®. “As we have seen repeatedly, when Orlando Health enters a new area, patient care improves, relationships with physicians and team members grow stronger and surrounding communities benefit. We are excited to recreate the same results for these communities.”

With the acquisition of the three hospitals, Orlando Health adds nearly 600 beds to the system. Rockledge Regional Medical Center is a 298-bed acute care hospital, Sebastian River Medical Center is licensed for 178 beds, and Melbourne Regional Medical Center has 119 beds, all in private rooms.

Steward Health Care, the for-profit system based in Dallas, Texas, filed for bankruptcy in the spring and has been working to sell its 31 hospitals. Steward recently announced that it reached a deal with Medical Properties Trust, which owns Steward’s real estate, on a deal that would keep most of the hospitals open.

Initially, Medical Properties Trust raised some objections to the planned deal, but that was before the company reached its settlement with Steward. When Steward announced the deal two weeks ago, the system said the agreement involved the “release of billions of dollars of claims held by MPT against Steward.”

Notably, Steward also said that the agreement would allow Steward to retain the proceeds of sales from the three Florida hospitals to Orlando Health. Steward said it would use the revenue from the sale of the facilities to pay lenders and creditors.

U.S. Bankruptcy Court Judge Christopher Lopez of the Southern District of Texas signed off on the sale Wednesday, and the closing is slated to take place Sept. 23, WUSF reported.

Orlando Health first announced plans to buy the hospitals last month and was named the first qualified bidder for the hospitals and was designated as the “stalking horse,” or the bid to beat. The health system previously said it hopes to complete the transaction in the fourth quarter of 2024.

Orlando Health has been pursuing ambitious expansion plans recently.

Last month, Orlando Health announced plans to acquire five Alabama hospitals from Tenet Healthcare in a $910 million deal. Tenet is selling its 70% majority ownership interest in Brookwood Baptist Health in Birmingham, Alabama.

In the Alabama deal, Orlando Health says it will manage day-to-day operations of Brookwood Baptist Health in partnership with Baptist Health System. Brookwood will remain a faith-based organization, Strong has said.

Orlando Health, based in central Florida, operates 17 hospitals with a total of 3,487 beds, 10 freestanding emergency departments, and nine hospital-at-home programs. The system says it has four other hospitals and six other emergency departments in development.

Steward has also received court approval to sell six of its hospitals in Massachusetts to new owners. However, two Steward hospitals in Massachusetts closed their doors Aug. 31: Carney Hospital and Nashoba Valley Medical Center.