San Antonio’s Nix Health is slated to be acquired by a Los Angeles private health care company this quarter.
Prospect Medical Holdings inc. has entered into an agreement to buy Nix from a subsidiary of Merit Health Systems LLC of Louisville, Ky. Terms weren’t disclosed.
Nix has been in San Antonio since 1930 and operates the Nix Medical Center in downtown, as well as Nix Alamo Heights on Broadway, Nix Specialty Health Center on the Northwest side, three Nix Orthopaedic Centers and various Nix physician offices. Nix has about 900 employees.
Nix allows Prospect to expand beyond its Southern California roots, where it owns and operates five hospitals with a total of 759 licensed beds, Prospect’s website says.
“What Prospect offered to Nix was a better opportunity in terms of access to capital,” said John Strieby, who has overseen Nix’s operations and will serve as its chairman, president and CEO under Prospect’s ownership. “Prospect is backed by one of the largest private equity venture capital firms, certainly in California, and possibly the country.”
That private equity firm, Leonard Green & Partners LP, has about $9 billion in capital under management, according to its website.
Strieby acknowledged making similar remarks when Merit Health acquired Nix in 2004. But he added, “Now we’ve got an even better source of capital than we had with Merit.”
Merit had plans to build a national network of independently operated urban hospitals, but it never panned out. Strieby speculated the economy may have been a factor. Merit officials couldn’t be reached for comment.
Dr. Arthur Centeno, Nix’s chief of staff, welcomed the sale to Prospect.
“With the uncertainties in the health care environment and the health care reconciliation act, which in large part remains to be written, I think this gives us a solid foundation to go forward,” Centeno said.
Nix is licensed to operate 294 beds; 161 beds were in use at the end of 2009, figures from the state show. More recent figures couldn’t immediately be obtained.
Nix generated net patient revenue of more than $100 million in 2011, Strieby said. Figures reported to the state show it had about $100 million in revenue and total expenses of nearly $87 million in 2009.
Prospect Chairman and CEO Samuel Lee said in statement: “Nix has a proven track record of quality and service, excellent facilities, a distinguished medical staff, superior leadership, dedicated employees and great opportunities for the future — exactly what we envision with our strategic plan.”