A for-profit, venture capital firm will pay $485 million for Akron-based Summa Health.
Health Assurance Transformation Corporation (HATCo) and
Summa finalized the deal Thursday, the two sides announced.
Summa confirmed plans for the acquisition in January after signing a letter of intent on the deal. The two parties spent the months that followed under a due diligence period to firm up details of the acquisition and plans for the future.
Akron community members and industry experts previously expressed concerns and skepticism over the deal, which would make the nonprofit Summa Health a for-profit hospital system. HATCo was founded by General Catalyst, a private venture capital firm based in Cambridge, Mass., in 2023.
Summa has said the sale was the hospital system's only option to remain financially stable.
The $485 million purchase price, when added to Summa Health’s current cash, will enable the health system to eliminate $850 million in existing debt, according to a release issued by Summa and HATCo. The remaining cash will fund a new, separately governed foundation focused on community health in Greater Akron, the release said.
“Our goals are to expand access to care and improve the experience for our patients, providers and staff,” said Dr. Cliff Deveny, Summa president and CEO, in a statement.
HATCo has also committed $350 million in capital funding within the first five years, as well as $200 million for strategic and transformative investments over the first seven years, according to the joint release.
Akron Mayor Shammas Malik said during a news conference Thursday that he's pleased HatCo wants to make significant investments in the Summa system, "and to make commitments not to reduce staffing to keep the charity care component."
"I've been heartened by what I've seen so far," Malik added.
Research from Harvard Business School found when private equity firms acquire nonprofit hospitals, there can be negative outcomes such as rising costs for patients, staff reductions and cutting services that primarily benefit low-income populations and people of color.
Community members previously raised concerns that the same could happen at Summa, which operates three hospitals and 14 medical centers as the largest health care provider in the Akron-Canton area.
"At the same time, I've always said we are going to continue to listen and continue to ask questions ... we're not going to shy away from that," Malik said.
The transaction is subject to regulatory review and approval.
