Geisinger Health System completed its acquisition of AtlantiCare Health System Inc., the dominant health-care system in Atlantic County, the two organizations said Thursday.
The deal, which was announced nearly two years ago, adds to Geisinger's acute-care operations. Based in Danville, Pa., Geisinger already owned six acute-care hospitals in Pennsylania and this deal expands its licensed acute-care bed count by 36 percent.
AtlantiCare operates hospitals in Atlantic City and Galloway Township with a total of 593 licensed beds. In addition to its hospitals, Geisinger has a physicians group with 1,278 doctors and a health insurance company that already has a foothold in New Jersey through a Medicare Advantage plan.
David T. Feinberg, Geisinger's chief executive, said the nonprofit, has already been working with AtlantiCare for the last nine months.
"We've seen decreased utilization of unnecessary ER visits, decreased hospital admissions, the things that Geisinger is known for," Feinberg said.
While Geisinger did not pay for AtlantiCare, as is common in mergers of tax-exempt organization, the final merger agreement called for Geisinger to invest $62.5 million in AtlantiCare as part of a $175 million, five-year investment plan. AtlantiCare is responsible for the first $50 million. Then AtlantiCare and Geisinger will split the remaining $125 million.
Under the deal, Geisinger will take on AtlantiCare's $226 million in long-term debt and lease obligations, according to Geisinger's chief financial officer Kevin Brennan. Geisinger had $1.3 billion in debt and capital lease obligations as of June 30.
Geisinger had operating profit of $160 million on $4.56 billion in revenue in the year ended June 30. AtlantiCare's operating profit for all of 2014 was $43.7 million on revenue of $805.3 million.