Ohio-based Summa Health and General Catalyst’s Health Assurance Transformation HATCo, has signed a definitive agreement to purchase Summa for $485 million.
Summa Health is a nonprofit healthcare system with over 30 locations throughout the Akron and Canton areas.
The purchase price, when added to Summa Health’s current cash, will allow the health system to dispose of $850 million in existing debt.
In a statement, Summa Health explained that the residual cash, after closing adjustments, will fund a new, independently governed community foundation that will back targeted investment aimed at benefiting community health initiatives in the Greater Akron region.
HATCo has committed to $350 million in capital funding within the first five years to guarantee vital resources are obtainable for routine purposes and investment in technologies that support growth.
Additionally, HATCo has pledged $200 million for strategic and transformative investments and to drive innovation over the first seven years.
“Our focus is on creating new and expanded opportunities for Summa Health, the communities it serves, and its talented workforce,” Dr. Marc Harrison, cofounder and CEO of HATCo, said in a statement.
“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.”
Hemant Taneja, CEO of General Catalyst and founder and executive chairman of HATCo, said that the company sees the long-term investment in Summa Health 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,” Taneja said in a statement.
Dr. Cliff Deveny, Summa Health president and CEO, said that as part of HATCo, Summa Health will be better positioned to build upon its 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,” Deveny said in a statement.
THE LARGER TREND
In Oct. 2023, Taneja and Dr. Harrison announced the formation of HATCo and its intent to purchase a health system.
In January, General Catalyst unveiled its plans to purchase Summa Health, stating that acquiring Summa Health was not simply another ‘private equity’ deal, but would focus on implementing innovation.
Last month, General Catalyst announced it secured $8 billion in new capital, including $6 billion for its latest fund, Fund XII, and $2 billion in separately managed accounts.
The funding was used to boost the firm’s investments across various sectors, including defense and intelligence, climate and energy, AI, industrials, and healthcare and fintech.
General Catalyst’s portfolio includes healthcare software company Commure, which was founded by General Catalyst’s CEO Taneja in 2017 and was launched in 2020.
Also in October, Commure partnered with HCA Healthcare to implement new technology. The partners spent the past two years co-developing an ambient AI platform, Scribe, which provides AI-enabled automatic clinic documentation. Originally announced in 2021, the HCA partnership was the first in General Catalyst’s Health Assurance Ecosystem.
In January, Holly Maloney, managing director at General Catalyst told MobiHealthNews: “We’re really excited about what we’ll learn, and the potential around HATCo.”
