A private equity firm announced plans today to acquire financially troubled insurance Universal Health Care, which is headquartered in downtown St. Petersburg.
MBF Healthcare Partners, a Coral Gables-based firm that specializes in health care, has signed a letter of agreement to buy Universal Health Care. The sale is expected to close before the end of March.
As part of the deal, MBF will purchase Universal's 150,000 square-foot office building at 100 Central Ave. and does not plan to move the company's 1,000 employees or operations.
Health care providers and policy holders are not expected to be effected by the sale, company officials said.
MBF expects to hire additional employees, but company officials could not say how many.
"During the last couple of months there have been reductions in the workforce at Universal," said MBF Managing Director Marcio Cabrera. "We believe based on our assessment that we need to add employees to Universal."
Universal laid off employees last month, has fallen under the scrutiny of federal regulators and has been ordered by two states to stop writing new policies.
The federal government last year rated Universal's Medicare policy as below average, giving it two and a half stars out of five in its ranking system.
Last year, the company reached an agreement with the state of Georgia to stop enrolling new Medicare customers.
Many of the company's problems were tied to not having sufficient capital to meet federal standards, Cabrera said.
Universal's founder, Dr. A.K. Desai, will remain at the company, but not in his current role of chairman and CEO. Desai started the company in 2002, and it has grown from its St. Petersburg roots to providing Medicare Advantage health plans in 19 states and a Medicaid HMO in Florida.
Universal company officials did not return calls seeking comment, but MBF released a statement from Desai.
"We believe this transaction will enable Universal to transform health care in America and preserve jobs in Florida," Desai said in the statement.
MBF is a health care industry-focused private equity firm that invests in leveraged buyouts, growth capital investments and recapitalizations.
The firm's chairman, Miguel Fernandez, said he has high hopes for Universal.
"Dr. Desai is a health care visionary, and together we hope to build a leading HMO," he said in a statement.