The Blackstone Group and Morgan Stanley Capital Partners (to be called Metalmark Capital henceforth) have agreed to invest $1.75 billion (€1.44 billion) in Vanguard Health Systems, an operator of acute care hospitals and related healthcare facilities and services.
The deal will see Blackstone purchase a majority equity stake in Vanguard. Morgan Stanley Capital and management will retain a 30 percent interest going forward. Morgan Stanley Capital formed Vanguard in 1997.
Vanguard operates 16 facilities in Chicago; Phoenix, Arizona; Orange County, California; and San Antonio, Texas.
Earlier this month, Morgan Stanley announced an agreement with its private equity direct investment arm to establish an independent firm called Metalmark Capital LLC, based in New York.
The new firm will be led by Howard Hoffen, the head of Morgan Stanley Capital Partners and an 18-year veteran of Morgan Stanley. Hoffen and senior management will own Metalmark but continue to manage roughly $3 billion in funds for their former parent company. The new firm will become effective in early September, according to a press release.