Metairie-based Bernhard, an engineering and contracting firm owned by Jim Bernhard’s private equity firm, Bernhard Capital Partners, has inked a deal with East Alabama Medical Center to upgrade and operate the two-campus medical system’s energy infrastructure for the next 30 years.
Under the terms of the deal, Bernhard will invest some $30 million upfront to address a backlog of deferred maintenance at EAMC, whose main campus in Opelika, near Auburn, and satellite campus in Lanier total some 850,000 square feet of building space.
The deal also includes more than $40 million in net lease considerations that EAMC retained at closing—essentially upfront cash that the hospital can invest at its discretion.
In return, Bernhard will receive monthly payments from EAMC as part of its service agreement to run the more energy-efficient heating and cooling system at the medical center campuses.
The amount of the monthly service agreement payments was not disclosed.
“It’s a better long-term deal for the hospital and over the life cycle, it makes a lot more sense for them,” says Bernhard Vice President of Business Development Rob Guthrie. “It has the benefit of giving the hospital the ability to monetize their assets and realize cash upfront.”
The district energy sector is a growing industry that Bernhard is trying to capitalize on. In 2018, the company finalized a long-term deal with Our Lady of the Lake Regional Medical Center to upgrade and run the heating and cooling system on its Baton Rouge campus. The company also has deals with other medical centers in the works, Guthrie says.
Bernhard, through a joint venture with Johnson Energy Controls, is also currently negotiating with LSU to provide energy services to the main Baton Rouge campus. The LSU Board of Supervisors voted in September to forgo a public bid and negotiate directly with the Bernhard team to come up with a proposal.
Though terms of the proposed LSU deal are unclear, the agreement would be similar in structure to that of the EAMC deal.
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