Daughters strike new deal to keep Gilroy hospital open

GILROY–The Daughters of Charity Health System Board of Directors has selected BlueMountain Capital Management, a private investment company, to recapitalize its operations, including Saint Louise Regional Hospital in Gilroy, the hospital system announced today in a press release.
“Blue Mountain is contributing over $250 million of capital and is sponsoring Integrity Healthcare to manage and operate the six California hospitals and medical foundation, thus assuring the communities served by the hospitals a continuance of care,” the statement reads.
DCHS President and CEO Robert Issai said the selection “ensures communities served by the hospitals will have uninterrupted access to high quality health care, and that the current pension benefits remain the same.”
The release goes on, “Upon the close of the transaction, all pension and retirement plans that are currently ‘church plans’ will be required by law to become plans that are subject to the Employee Retirement Income Security Act of 1974…the transaction agreement must be reviewed and approved by the California Attorney General before it is finalized.”
The release says that, “Integrity Healthcare, an entity owned by BlueMountain and formed to oversee the Hospital group, will provide key management services and day-to-day operational support, while BlueMountain will provide significant new capital investment in the operations and facilities.”
It describes BlueMountain as “a global investment firm with more than $21 billion under management…”
Issai in the statement also said, “…our priority was to sleek the strongest bidder who could provide the greatest long-term financial stability while honoring the obligation to our associates, physicians, retirees and other constituents.”
The first proposed deal to sell the DCHS facilities, to Prime Healthcare, for more than $843 million fell through in February after the would-be buyer pulled out of the arrangement when California Attorney General Kamala Harris imposed what Prime considered unreasonable conditions, such as promising to keep the hospitals open for 10 years.
Under the new proposal, BlueMountain would have the option of buying the DCHS after three years. 
(This is a breaking story, watch for more details soon.)