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Caritas Sold To NY Firm For Nearly $900M

The Catholic non-profit Caritas Christi Health Care announced Monday that it had closed on the purchase by Cerberus Capital Management, a New York-based private equity firm.

Cardinal Sean O’Malley and the leaders of Caritas Christi say the deal will preserve Catholic care in Massachusetts and provide funds to make the six-hospital chain more competitive. The new owners have agreed to pay off Caritas' debt and assume the network’s pension obligations.

The equity firm says it will invest $110 million in improvements at the hospitals and make sure that an additional $290 million is spent to improve the system and its operations.

In the announcement, Caritas said that senior executives, including CEO Ralph de la Torre, would be kept in place.

The deal was previously approved by Massachusetts Attorney General Martha Coakley and a justice of the state’s highest court. The approvals were needed because the sale would change Caritas from nonprofit to for-profit status. As a for-profit network, Caritas will begin paying property, state and federal taxes.

Some community hospitals are worried about competing with the for-profit network. Caritas, under the new ownership, has agreed to keep all six hospitals open for at least three years.

The hospitals in Boston, Brockton, Fall River, Methuen and Norwood were previously run by the Boston archdiocese until 2008.

This program aired on November 8, 2010. The audio for this program is not available.

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