KPC Group bids to buy four Verity Health hospitals
Corona-based KPC Group has bid $610 million to purchase four of the nonprofit Verity Health System hospitals, including two in Southern California.
The KPC Group is the initial bidder for St. Francis Medical Center in Lynwood, St. Vincent Medical Center in Los Angeles, Seton Medical Center in Daly City and Seton Coastside in Moss Beach. O’Connor Hospital in San Jose and St. Louise Regional Hospital in Gilroy are not included in the bid.
Verity’s six hospitals were originally owned and operated by the Daughters of Charity of St. Vincent de Paul. After years of financial struggles, Integrity Healthcare took over management of the hospitals in 2015. Nantworks, the Culver City company controlled by Dr. Patrick Soon-Shiong, purchased Integrity in 2017. (Soon-Shiong, a physician and entrepreneur, purchased The Times last year.)
Last August, Verity filed for bankruptcy protection, citing mounting losses and debt.
Santa Clara County previously bid for the two Verity hospitals not included in the KPC Group offer. That sale was approved in bankruptcy court, but has been challenged by the state attorney general.
If KPC Group’s bid is approved by a court next month, an auction could be held in April. A list of creditors with the 50 largest unsecured claims that were not insiders included Aetna Life Insurance Co., Medline Industries Inc. and Anthem Blue Cross. Nantworks is included in a broader list of all creditors, though the amount owed to each entity on that list was not specified.
The winning bid will still be subject to approval by the bankruptcy court.
Peter Baronoff, chief executive of KPC Group, said in a statement that the company is “excited about the future of these hospitals, and we look forward to the opportunity of continuing their excellent track record of care in the communities they serve.”
KPC Group’s offer sets the floor for a potential future auction of the four hospitals, in which other buyers could submit competing or higher bids. If no other qualified bids are received, KPC Group will be named the successful bidder, according to the asset purchase agreement.
Rich Adcock, chief executive of Verity, said the healthcare system expects a “very robust auction.”
“There’s a lot of interest in each of these facilities,” he said.
KPC Group owns medical centers in Anaheim, Hemet, Menifee and Santa Ana, among other locations.
The SEIU-UHW, which represents more than 1,000 workers at St. Vincent and St. Francis hospitals, released a statement saying the union was “interested in hearing from KPC about its plan to sustain and invest in the hospitals and caregivers” and would be “looking to ensure that there is a good plan to protect workers and services.”
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