AKRON, Ohio — An agreement has been reached for General Catalyst’s Health Assurance Transformation LLC (HATCo) to acquire Akron-based Summa Health, pending regulatory review and approval.
3News first reported on this potential acquisition earlier this year on Jan. 17.
Late Thursday morning, details were released saying the two organizations signed a definitive agreement “outlining a proposed transaction focused on stabilizing the health system and creating a more proactive, affordable and equitable system of community-based, lifelong healthcare.”
“The purchase price of $485 million, when added to Summa Health’s current cash, will enable the health system to eliminate $850 million in existing debt,” according to a press release. “The remaining cash, after closing adjustments, will fund a new, separately governed community foundation that will support focused investment to benefit community health in the Greater Akron region.”
It's also reported that HATCo committed to $350 million in capital funding within the first five years to ensure necessary resources are available for routine purposes and investment in technologies that support growth.
“Additionally, HATCo has committed $200 million intended for strategic and transformative investments and to drive innovation over the first seven years,” according to a press release.
Summa Health says it will maintain its charity care policy, community benefit and essential services it currently offers, while focusing on sustainable growth and enhanced access to care.
“Summa Health’s staff is at the forefront of all discussions relevant to the transaction,” according to the press release. “Its employees, providers and leadership team will transition to the new entity. Maintaining and growing Summa Health’s workforce is critical to pursuing this transformative work.”
Both companies say they have been working closely together to shape a plan that’s focused on stabilization and transformation.
“In the stabilization period, Summa Health will take the needed steps to transition into a for-profit, taxable structure and establish and optimize processes and best practices to maximize resources, improve workflow and, most importantly, enhance the experiences of patients, providers and staff,” according to a press release. “While true transformation will take time, the organizations have begun to collaborate on a transformation plan, which includes the creation of working groups with representation across Summa Health to identify and map out the many opportunities ahead.”
STATEMENTS ABOUT THE AGREEMENT
Cliff Deveny, M.D., Summa Health President and CEO
“As part of HATCo, Summa Health will be better positioned to build upon our existing strengths and capabilities while also benefiting from new opportunities and technology. Our goals are to expand access to care and improve the experience for our patients, providers and staff. This is only the beginning of our long-term journey together.”
Marc Harrison, M.D., co-founder and CEO of HATCo
“Our focus is on creating new and expanded opportunities for Summa Health, the communities it serves, and its talented workforce. I am proud of the strong collaboration our teams have demonstrated over the past several months, and we look forward to continuing to work together to develop a plan that optimizes operational stability, while positioning Summa Health to drive meaningful transformation in the years ahead."
George Strickler, Chair of Summa Health’s Board of Directors
“Our respective leaders and teams worked together through a thoughtful, thorough due diligence process to define the terms of this agreement, which further cemented our trust and confidence in HATCo’s commitment to Summa Health, our culture, and the Greater Akron region. This opportunity with HATCo puts us in a stronger position to navigate headwinds, transform the health system and create a sustainable path forward to better serve our people, our patients and our communities.”
Hemant Taneja, CEO of General Catalyst, and founder and executive chairman of HATCo
“We view this long-term investment as a critical milestone -- not only to build on Summa Health’s existing strengths, but also to create a blueprint for the future of healthcare delivery. We couldn’t be more excited for the opportunity to execute on that transformative vision together with Summa Health and our innovation ecosystem to make healthcare a more proactive, affordable, and equitable system of care.”
SUMMA HEALTH SHARES MESSAGE TO COMMUNITY
Here is the full message as posted online by Summa Health:
To our valued community members,
As you may be aware, Summa Health has been working with HATCo to thoughtfully evaluate and define a proposed transaction. We’re pleased to share we have signed a Definitive Agreement outlining the proposed terms and conditions of HATCo’s acquisition of Summa Health. The transaction is subject to regulatory review and approval.
Our time together has only further cemented our trust and confidence in HATCo’s commitment to our organization, culture and the Greater Akron region. They have committed to a significant investment that will provide the resources we need to build upon our existing strengths and capabilities; we’ll also benefit from new opportunities and technology that will expand access to care and improve patient, provider and staff experiences.
This is a true investment in our future. We have agreed to a purchase price of $485 million, which, when added to Summa Health’s current cash, will enable the health system to eliminate $850 million in existing debt. The remaining cash, after closing adjustments, will fund a new, separately governed community foundation that will support focused investment to benefit community health in the Greater Akron region.
HATCo has also committed to $350 million in capital funding within the first five years to ensure necessary resources are available for routine purposes, and investment in technologies that support growth. Additionally, HATCo has committed $200 million intended for strategic and transformative investments and to drive innovation over the first seven years.
The new community foundation will allow us to deliver a broader impact than we can achieve today. In order to begin planning for this foundation, Summa Health has established a working group comprised of community members and current members of the Summa Board of Directors. Together, this group has defined the mission, vision and values of the new community foundation, established the structure for the proposed board and reviewed nominations for board members.
While this important planning has begun, it is important to note that the new community foundation will be created through a process that is independent from the transaction and will be governed separately from HATCo and the health system following the closing.
Above all: We remain deeply committed to investing in the communities we serve. Summa Health will maintain its charity care policy, community benefit, and essential services it currently offers while focusing on sustainable growth and enhanced access to care for people across the region.
As part of HATCo, we will be able to invest in and grow our team in ways we could not achieve as an independent organization. And while the structure and model of Summa Health will shift when we become part of HATCo, our priorities will not change and our providers, employees and leadership team will transition to the new entity.
We are submitting applications related to the Definitive Agreement to the Ohio Attorney General, the Ohio Department of Insurance, the Federal Trade Commission and other regulatory bodies for review and approval. This is an important step in the process, and we expect reviews to take time given the unique nature of this transaction.
Thank you for your continued support of Summa Health.
Sincerely,
George Strickler, Chair, Summa Health Board of Directors
Cliff Deveny, MD, President and CEO, Summa Health
