Prospect Medical Holdings, the parent company of Nix Health, is seeking a buyer for the downtown hospital and four affiliated medical facilities.
Los Angeles-based Prospect, which acquired Nix Health in 2012, told the Rivard Report it is seeking local or national buyers for its San Antonio properties in order to focus more on other markets, including Rhode Island, Connecticut, and New Jersey.
“We are proud of the care we have provided and the difference we have made in the competitive San Antonio market,” Prospect officials said in a statement Wednesday. “We will intensify our focus and resources in our other markets where we can provide quality, cost-effective, coordinated care through our comprehensive network of hospitals, medical groups, and ancillary facilities.”
Nix officials declined to comment.
Nix Health has been in San Antonio since 1930 and operates the Nix Medical Center downtown, Nix Alamo Heights, two behavioral health centers, a sleep clinic, and physician offices for its home health care program. These facilities are the only ones in Texas owned by Prospect, which has acquired 20 hospitals and more than 165 primary and specialty clinics throughout its regional network since forming in 1996.
Prospect recently had its credit rating downgraded by Moody’s Investor Service, the credit bond rating business of the Moody’s Corporation, citing Prospect’s significantly higher debt load since borrowing $440 million last year to pay a dividend to the private equity funds that own Prospect.
The report said the company’s debt at the end of 2018 amounted to 11.5 times its cash earnings before interest payments and taxes. That compared to a ratio of 4.9 for the fiscal year ended September 30, 2017, Moody’s said.
The downgrading by Moody’s pushes the company deeper into speculative grade or “junk” status.
The J. M. Nix Professional Building, now simply known as the Nix Medical Center, was a dream of developer Joseph M. Nix, who envisioned a large, multimillion-dollar building that not only housed a hospital, but also physicians’ offices and a parking garage. The late-1920s Gothic-style 22-story building was designed by architect Henry T. Phelps, who also designed the 1922 Maverick Building.
Nix Health soon became home to a storied list of medical firsts, including opening the first nuclear medicine department to offer radiation therapy in San Antonio, and development of the first non-rusting metal used in bone fracture repair, known as Vitallium metal plates.
Prospect bought Nix Health from Kentucky-based Merit Health Systems, who oversaw the facilities since 2004.
“Since acquiring the Nix, we have invested to improve the physical plant, equipment and IT systems, expanded service lines and increased hospital volume, and improved the quality of care and patient satisfaction,” the company said.