Project Unify is the Orwellian name for one of the most important business deals in eastern North Carolina: The pending merger of ECU Physicians and Vidant Medical Group, each of which employs about 400 doctors with a combined staff of more than 1,200.
The plan negotiations were disclosed last July, and the time needed to complete the deal has frustrated many, East Carolina University Chancellor Cecil Staton said in early March. Virtually everything about health care tends to be complicated, he says, but it’s a complex task to combine a state-owned physicians’ practice with Vidant, an independent, not-for-profit system with net income of $81 million and annual revenue of $1.6 billion last year.
ECU Physicians is made up of doctors who are state employees and, in many cases, also teach at the university’s Brody School of Medicine. Efficiencies in a combination could cut redundant jobs and change compensation plans.
Vidant and Brody have a combined annual economic impact of $3 billion, while tens of millions of dollars are likely to change hands in the transaction, according to members of the UNC Board of Governors, which must approve the sale. The board spent an hour at a March meeting arguing over how to speed the merger process. Ultimately they gave authority to Staton, UNC System President Margaret Spellings and board member Scott Lampe to try to negotiate a deal by May.
One key issue is how much Vidant should pay for control of the combined entity. A consulting group’s study of the merger suggests that Vidant should be paying eight to 10 times the pre-tax operating earnings of the practice, based on similar transactions nationally, Greenville businessman Harry Smith said at the board meeting in early March. His comment caused a UNC system lawyer to caution the board about discussing deal specifics in public. Only a handful of board members have received the consultants’ study, according to member Marty Kotis, a Greensboro developer who says Project Unify has been too secretive.
Combining the competing physicians groups should shore up ECU’s Brody School of Medicine, which has had volatile financial results because of state budget cuts and increased bad debt from poor and uninsured patients. Brody, which has annual revenue topping $250 million, has been seeking a new dean for more than a year as uncertainty over the physicians’ merger is slowing the recruitment process, says Staton, who arrived in Greenville last July.
WILMINGTON — New York-based Rouse Properties planned to acquire Independence Mall for an undisclosed amount. The company owns and manages 35 shopping centers in 21 states, including malls in Greenville and Hickory. The mall was previously slated to be sold in a foreclosure auction after its owner, Centro Independence, defaulted on a $110 million loan.
WILMINGTON — Through a partnership with Mediterranean Shipping and Maersk Line, North Carolina Ports is adding a new trans-Atlantic container service that will provide access to ports in Germany, France and the United Kingdom. N.C. Ports plans to invest $120 million in infrastructure improvements at the Wilmington site over the next few years.
MOREHEAD CITY — Raleigh-based West Town Bancorp will buy Sound Banking for about $24.6 million. The parent of Illinois-based West Town Bank & Trust moved its headquarters to Raleigh in 2014 and has two branches in each state. Sound Bank operates five branches in eastern North Carolina. The combined bank will have about $485 million in assets. The deal is expected to close in the third quarter.
