Officials at Butler Health System and Excela Health announced that after a period of due diligence the parties have entered into a definitive agreement to combine the two organizations into a new health system. Following a Letter of Intent that was announced in early June, the definitive agreement is the legally binding agreement that defines the details of the transaction.

The organizations will now move forward with necessary state and federal regulatory approvals, which are anticipated to be complete by the end of the year.

The agreement includes Butler Memorial Hospital, Clarion Hospital, Frick Hospital, Latrobe Hospital and Westmoreland Hospital.

“Today’s announcement represents a major step forward in the process to redefine locally-controlled, community-based care,” said Ken DeFurio, BHS President & CEO. “Our commitment to our patients in providing high-quality, low-cost sophisticated care in our region will be the cornerstone of the new entity.”

John Sphon, Excela CEO, stated, “This is a very important development for our respective organizations and the proposed new system. We are now one step closer in realizing a goal that will have a dramatic and positive impact on healthcare for those we serve.”

When finalized, the new health system will employ approximately 7,300 people, and have over 1,000 physicians and practitioners that serve a population of 750,000. A name for the newly created organization will be announced at a later date.

Paul Bacharach and Tim Morgus, the Board Chairs of Excela and Butler respectively, jointly expressed their organizations’ mutual enthusiasm regarding the creation of the joint health system. “Our Boards approached the merger as an opportunity to affect real and meaningful change in the landscape of healthcare in western Pennsylvania. We are most excited regarding the possibilities that are now before us.”