The merger will entail massive facility improvements worth some P1 billion, according to Monico Jacob, STI’s president and chief executive officer.
DLS-STI Medical Center has already invested P100 million for the expansion and renovation of its facilities, which was sourced through debt and equity. The medical center could increase it up to P300 million, as the project requires, Jacob said.
“One of the major components of the plan is to improve the facilities and capabilities of the new DLS-STI Medical Center. With fresh capital, a medical arts building and a state-of-the-art facility will be added to the existing infrastructure. This partnership will also set up satellite clinics around Metro Manila,” Jacob said.
He said bed capacity would be raised from 150 to 200 to achieve economies of scale, and while the number of active doctors would double from the existing 200.
The DLS-STI Medical Center is also negotiating to acquire three hospitals as part of its expansion.
“We are looking at buying smaller hospitals with a bed capacity of 70 to 150. We could possibly invest P100 million to P300 for each of the hospitals,” Jacob said.
Under the merger, the medical center will put up four to five clinics for P100 million. The satellite diagnostic centers and clinics would serve as feeders to the hospitals.
Also, part of the partnership is to enhance medical service through STI’s information and communication technology expertise to improve operations.
“With an edge in computer education, STI has integrated ICT education in its nursing programs to make the nursing professionals even more competitive here and abroad,” Jacob said.
STI will assist the hospital with financial, information technology, and human resources and marketing support.
In return, DLS would provide its expertise in healthcare services to STI’s curricula and offer its center as a training ground and even as a workplace for STI nursing students.
“We expect 30-percent to 35-percent revenue growth for DLS-STI Medical Center starting this year with the rationalization of operations and major improvements,” Jacob said.
STI acquired a majority share in De los Santos College in 2002 and transformed it into DLS-STI College of Health Professions.
The DLS-STI Medical Center venture is the first acquisition of STI in a hospital though it has revealed its plans to acquire more in the future to strengthen nursing education.
To date, STI has invested more than P100 million for its nursing program. The investment includes employing faculty members and improving nursing skill laboratories.
STI has been providing ICT-enhanced education in the Philippines for the last 20 years and reported around P1 billion in revenues last year from its 70 franchise operators nationwide. Its headquarters posted P270 million in revenues last year.
On the other hand, the De los Santos Medical Center, which started as a small orthopedic clinic in 1949, registered close to P200 million in revenues last year. Net income is around P15 million, hospital officials said.