Case Study: St. Francis Hospital, Inc.
John Bodine
Situation Summary
In October 2011, St. Francis undertook a major expansion and renovation, resulting in the opening of St. Francis Heart Hospital and St. Francis Women’s Hospital in 2013. In 2014, St. Francis was confronted with a $30 million multiyear accounting restatement, regulatory issues, recurring losses, executive turnover, leveraged balance sheet, and a high-risk projected year-end cash shortfall. During this time, management led an unsuccessful sales process in an attempt to stabilize the institution. Huron was engaged in late 2014 in a financial advisory role, which resulted in materially extending the health system’s liquidity runway and enabling the pursuit of strategic options.
Our Approach
Huron Transaction Advisory (HTA) was engaged in early spring 2015 to execute a sales transaction for St. Francis, following the unsuccessful management-led sale process. HTA designed a comprehensive but expedited sales process to complete the sale despite significant financial, legal, and regulatory complexities. HTA also prepared alternative financing proposals that enabled the board to contemplate dual path alternatives.
Results and Benefits
Within weeks, HTA provided the St. Francis Board with letters of intent from reputable parties that met the board’s affiliation criteria and offered potential liquidity support. HTA advised St. Francis throughout extensive negotiations and due diligence processes that ultimately resulted in closing the transaction on Dec. 31, 2015.
Securities transactions provided by Huron Transaction Advisory LLC, member FINRA/SIPC.