Mercy Jeannette Hospital will become part of Excela Health Westmoreland Hospital's campus and most of its employees will be retained under a purchase agreement with would-be buyer Excela Health.

Under the agreement announced yesterday, the financially strapped 148-bed hospital will be renamed Excela Health Westmoreland Hospital at Jeannette. Excela Health officials refused to disclose the purchase price, saying it "wasn't definitive," but said they plan to invest $10 million in capital to improve the hospital and its equipment over the next five years.

The deal requires review and approval of state, county and church authorities, a process expected to take approximately six months. Yesterday's announcement followed discussions involving the boards and leadership of the Pittsburgh Mercy Health System, its parent company Catholic Health East and the Sisters of Charity of Seton Hill, who sponsor Mercy Jeannette.

"Excela Health will be a strong partner and the best way to preserve this valuable health care provider for the local community," Mercy Jeannette Administrator Julie Hester said. "Excela Health has been successful in stabilizing other community hospitals in the region that have faced challenges similar to those of Mercy Jeannette."

Formed in 2004, Excela Health operates Westmoreland in Greensburg, Latrobe Area and Frick in Mount Pleasant as a non-profit multi-hospital system. Formerly known as Jeannette District Memorial Hospital, Mercy Jeannette has been affiliated with the Pittsburgh Mercy Health System since 2002 but has lost money for years and faces a projected $6.5 million loss from operations in 2007.

Excela Health said it expects to offer employment to most Mercy Jeannette employees. Physicians may apply for privileges at any Excela Health hospitals.

Mercy and Catholic Health East officials did not return calls seeking comment on the agreement or if they considered other offers. But Excela Health spokeswoman Dorothy Hufford said she believed key factors in the deal were the hospital system's local roots and government and "nice track record in this area."

"Excela Health's mission is to improve the health and well-being of every life we touch," said Excela Health Chief Executive Officer David S. Gallatin. "The residents of western Westmoreland County are a significant part of that vision, and we are honored to partner with the community to work toward a more sustainable model and future for its hospital."

Mr. Gallatin and Ms. Hufford said operational changes at the hospital will remain under discussion during the approval process. But Mr. Gallatin pledged the hospital will continue to honor its traditional Catholic mission and directives, saying, "There will not be an appreciable change in how we view the services we'll provide to the community.''

"Excela Health is a good solution for Mercy Jeannette Hospital. It ensures that the facility will continue caring for its patients for years to come, while also respecting the Catholic mission," said Sister Vivien Linkhauer, president of the U.S. Province of the Sisters of Charity of Seton Hill.

The transaction must be reviewed by the state attorney general's office to ensure past charitable gifts to the hospital are fulfilled. It requires approval of Westmoreland County Orphan's Court, the Diocese of Greensburg and the Vatican.

The agreement comes more than a year after Mercy Hospital of Pittsburgh, also part of the Pittsburgh Mercy Health System, announced its planned merger with the University of Pittsburgh Medical Center.