Dive Brief:

• Ascension is selling its interest in five-hospital Alabama-based Ascension St. Vincent’s Health System to the University of Alabama Health System Authority for approximately $450 million, UAB announced Tuesday.
• The deal, which is expected to close later this year, pending regulatory approval, includes the system’s hospitals, clinical facilities, employees and freestanding emergency department.
• It’s the latest sell off for the St. Louis-based system, which has engaged in a flurry of M&A activity in recent months.

Dive Insight:

Ascension and UAB have worked together via a strategic alliance since early 2020.

UAB, which operates a 17-hospital network with more than 2,600 licensed beds, said the current deal is a “natural step” forward to expand sustainable care in Alabama.

The University of Alabama System Board of Trustees unanimously approved the purchase agreement during a special meeting called to review the deal, according to the press release.

Representatives from Ascension nodded to macroeconomic headwinds when discussing the deal.

“As part of our shared commitment to our patients, caregivers, associates and community, we have continued to discuss options to better deliver on our missions in an increasingly complex environment,” said Jason Alexander, Ascension St. Vincent’s CEO and Ascension senior vice president, in a statement.

The health system suffered significant financial losses during 2022 and 2023, causing Fitch and S&P Global Ratings to downgrade the nonprofit’s outlook to negative last fall. 

Though Ascension has made some financial progress as labor costs have come down, its outlook has remained negative this year. 

The nonprofit has recently engaged in a flurry of sales, ranging from hospitals to ancillary offerings.

The Catholic health system recently announced it would divest three Michigan-based hospitals and a separate deal to transfer operations of Ascension Via Christi Hospital in Pittsburg, Kansas, to health system Mercy. 

In February, it completed a deal to sell Our Lady of Lourdes Memorial Hospital​ in Binghamton, New York, to Guthrie Clinic. 

Ascension also announced plans to outsource Illinois-based hospitalist functions this spring, and sold its stake in Wisconsin insurer Network Health last year.

The system is separately addressing the fallout of a cyberattack that impacted operations at facilities across the country this spring. However, the cyberattack is not anticipated to have long term effects on Ascension’s financial rebound, according to Fitch.