AKRON, Ohio — The Ohio Attorney General’s office “conditionally approved” the $485 million sale of Summa Health to a venture capital firm on Wednesday, with the caveat that $30 million in cash and equity is given to a new nonprofit foundation to benefit the community.

The $30 million for the new foundation will include $15 million in cash and another $15 million in equity, Yost said in a statement.

Yost also set other conditions that need to be met by Summa Health and the buyer, Health Assurance. They include that the majority of the board’s members will not be affiliated with Summa, and that the foundation will not sell its $15 million equity interest.

Summa and Health Assurance had earlier said that some proceeds from the health system’s sale will fund a new, separately governed community foundation to benefit community health in Greater Akron.

The announcement was another step towards Akron-based Summa Health becoming a wholly owned subsidiary of Health Assurance Transformation Corp. (HATCo), a business venture owned by venture capital firm General Catalyst. The sale was first announced in 2024.

Private equity takeovers of hospital systems are a growing trend in the United States, but a national 2023 study shows such hospitals have worsening risks of falls and infections.

In Warren, two for-profit hospitals — Insight Hospital and Medical Center Trumbull and Hillside Rehabilitation Hospital — halted all operations in March. The closures were tied to ongoing bankruptcy and financial disruptions from former owner Dallas-based Steward Health Care.

Yost said his role in advancing the Summa sale was to protect Ohio’s charities.

“After a comprehensive review by the Charitable Law Section of my office, we’re confident that the agreement includes enforceable commitments that will secure Summa’s nonprofit mission, protect patient care, and ensure continued investment in the greater Akron community,” Yost said.

Yost continued: “With proper safeguards in place, this has the potential to strengthen health care in northeastern Ohio for years to come.”

Summa and Health Assurance must conduct a public hearing within 45 days to field comments on the proposed use of the proceeds, Yost said.

The approval of the attorney general’s office means that the sale has received two important regulatory approvals, said Michael Bernstein, Summa Health system director for corporate communications. Prior to Yost’s determination, the sale had received approval from the Ohio Department of Insurance.

“This is a significant milestone,” Bernstein said on Thursday. “We look forward to continuing to focus on completing all of the remaining details necessary to finalize the transaction, including the legal work required to meet the conditions developed by the attorney general’s office and the receipt of all other regulatory approvals.”

The purchase price, when added to Summa’s current cash, will enable the health system to eliminate $850 million in existing debt and concentrate on medical care, the companies have said. Summa Health will become part of Health Assurance.

Health Assurance has also committed to $350 million in capital funding within the first five years for investment in technologies that support growth, as well as $200 million intended for strategic and transformative investments and to drive innovation over the first seven years.

The sale has been criticized by Summa is Not For Sale, a coalition of public interest groups in Summit County concerned about public health. The coalition has charged Summa and Health Assurance with undervaluing the health system, but said Wednesday that it saw some positive points in the conditions that Yost set.

“Ohio A.G. Yost made a number of important improvements to this deal,” coalition member Jeff Barge, a Cleveland resident, said in a statement. “We’re pleased that the Akron community will continue to hold an equity position in Summa Health for at least the next three years, even if it is just 3 percent. That means the new community foundation will have access to all financial reports to ensure that all conditions of the sale are met.”

The coalition believes the true value of Summa Health exceeds $800 million, Barge said.

Because the sale involves the transfer of nonprofit assets from the health system to a for-profit entity, the attorney general’s office — as the agency charged under Ohio law with protecting charitable assets — is responsible for approving or denying the sale, Yost said.

Yost assessed whether the parties are in compliance with fiduciary duties, whether the nonprofit will receive full and fair market value, and whether the proceeds will be used in a manner consistent with Summa Health’s original charitable purpose.