The well-known non-profit cancer researcher and treatment provider City of Hope said on Wednesday that it plans to acquire the American Cancer Treatment Center.

The transaction is expected to be completed early next year and is awaiting regulatory approval. It will create a large inpatient and outpatient oncology care network that can provide services to approximately 115,000 patients each year. The final agreement stipulates that City of Hope, headquartered in Duarte, California, will pay $390 million for CTCA, headquartered in Boca Raton, Florida.

“At the American Cancer Treatment Center, we found an organization that shared with us the non-negotiable value of putting patients first, the urgency of eliminating cancer, and the promise of providing high-quality care,” accepted Robert Stone, CEO of City of Hope Said in the interview.

The deal will unite two cancer experts with very different backgrounds.City of Hope is one of them 71 cancer centers designed by the National Cancer Institute domestic. This is a distinction that federal agencies award to providers who meet the rigorous standards of the most advanced research that focuses on improving cancer prevention, diagnosis, and treatment. City of Hope is known as a leading cancer researcher, with more than 450 patent portfolios and 95 drugs initiated by active researchers. The provider also runs a large bone marrow and stem cell transplant program.

CTCA CEO Dr. Pat Basu said in an interview that he is looking forward to letting CTCA patients participate in City of Hope’s clinical trials and bone marrow transplant program, which he said is the best in the country. Basu stated that he believes that providers will work together to accelerate important milestones in cancer research and treatment outcomes.

“Strately speaking, this is a very complementary fit,” he said, noting that there is no geographic overlap between suppliers.

CTCA is a for-profit company with hospitals and clinics in three metropolitan areas: Atlanta, Chicago, and Phoenix.The company sold its hospitals in Philadelphia and Tulsa, Oklahoma earlier this year. Touted attention to partnership And a health system that relies heavily on telemedicine.

CTCA operates in the ten years ending in 2016 According to the federal ban This prohibits the company from making unsubstantiated claims in its advertisements. The Federal Trade Commission accused CTCA of making false statements about its success rate.According to a report, CTCA selected patients based on insurance coverage and exaggerated the success rate of their treatment 2013 Reuters survey.

“I’m not worried,” Stone said when asked about CTCA’s reputation. “Frankly speaking, I am more concerned about: What do cancer patients want? Cancer patients want timely access to doctors who focus on treating their cancer types.”

City of Hope conducted a thorough due diligence on CTCA, and Stone said he personally visited the company’s facilities in Atlanta and Phoenix. Stone said that Stone’s team believes that the two companies share the same values.

Once the merger officially takes effect, City of Hope said it plans to transform CTCA into a non-profit organization. Basu will continue to serve as CTCA’s chief executive officer and report to Stone. Stone said his team has not yet decided whether they will seek NCI designation for CTCA.

Stone said the broader goal behind the deal is to get more people to get cancer treatment. He said that 80% of cancer care is currently provided in a community setting, but the gap between those who get it and those who can’t get it is growing. The combined company will have 575 doctors and more than 11,000 employees in five states.

The transaction will expand the geographic coverage of the City of Hope. Except for a genomics research institute recently acquired in Phoenix, its 36 points of care are currently limited to Southern California.

Both providers work directly with employers to provide employees with cancer information and support. To this end, City of Hope launched the AccessHope project in 2019, and currently 17 Fortune 500 companies have participated.

City of Hope’s operating profit margin for the nine months ended June 30 was 2.7%, which was higher than the 0% in the same period last year. During 2021, significant investment income pushed its excess profit margin to 27%, when it had revenue of approximately US$2.6 billion and revenue of nearly US$700 million.

As a private company for profit, CTCA is not required to disclose information on its financial performance.

Since a 2020 report stated that the company is selling CTCA, rumors have been circulating. Consider private equity acquisitionsBasu acknowledged that there are other potential partners who have expressed interest, but expressed that City of Hope is more in line with CTCA’s mission and strategy.

Wednesday’s news came after other deals in the cancer treatment field.Last month, the first publicly traded oncology expert Listed After merging with a special purpose acquisition company. The Oncology Institute is headquartered in the Los Angeles area, has 50 offices in four states, and touts a value-based oncology care model.

Although City of Hope has brought cutting-edge research and clinical trials, Basu said that CTCA has brought a national oncology footprint and a well-known brand.

“In the end, I think it’s huge for patients, huge for our collective organization, huge for our employees on both sides,” he said.