Trinity Absorbing Connecticut's Saint Francis Care

CHICAGO - Michigan-based Trinity Health is acquiring Connecticut-based Saint Francis Care.

The two Catholic systems announced a definitive agreement Wednesday on terms for the deal, which expands Trinity's Northeastern footprint and gives Saint Francis improved access to capital.

As part of the agreement Saint Francis Care, which operates three hospitals, will form a non-profit regional health system along with Springfield, Mass.-based Sisters of Providence Health System, which is already a part of Trinity.

Christopher Dadlez, president and CEO of Saint Francis Care will lead the new regional ministry.

A joint statement from the two systems highlighted the benefit to Saint Francis Care of Trinity's high credit ratings in lowering the much smaller Saint Francis' costs of borrowing.

"Operating from our position of financial and clinical strength, we have been evaluating how best to position Saint Francis and continue its non-profit status as health care delivery continues to evolve, and we have concluded that this opportunity provides us with the potential to create a powerful, regional presence," said Dan O'Connell, chairman of Saint Francis' board.

As part of the agreement, Trinity will "ensure" the investment of at least $275 million over the next five years for capital projects.

The agreement has been approved by the Archdiocese of Hartford, which sponsors Saint Francis Care, but is subject to further approvals required by the church's Canon Law, and to state and federal regulatory approval. It is expected to be completed by late 2015.

Trinity, which carries ratings in the double-A category, is one of the largest Catholic systems in the nation after steady expansion that has grown its number of hospitals to 86 with operations in 21 states that generate annual operating revenue of about $13.6 billion with assets of about $19.3 billion.

Last year, Trinity merged with Catholic Health East to create the second-largest health care system in the country. Only St. Louis-based Ascension Health, also a Catholic system, is larger.

A frenzy of consolidation has taken place across the country as hospitals and systems ramp up scale to better deal with the federal health care law.

Saint Francis Care operates three hospitals, Saint Francis Hospital and Medical Center in Hartford, The Mount Sinai Rehabilitation Hospital in Hartford, and the Johnson Memorial Medical Center in Stafford.

"Our focus on building a people-centered health system fits very well with Saint Francis Care's strategy, capabilities and commitment to their communities," Trinity's chief executive officer Richard J. Gilfillan said in a statement.

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