Prospect Medical Holdings Inc.’s $205 million private equity-backed management buyout has closed after being approved by shareholders.

The West Los Angeles company, which operates five hospitals and manages an HMO network of physician groups, agreed in August to be acquired by entities affiliated with Leonard Green & Partners L.P., a West Lost Angeles private equity fund. More than 67 percent of shares were voted in favor of the merger agreement at a special meeting, the company said Wednesday.

Shareholders will be paid $8.50 a share, a 39 percent premium on Prospect’s closing price the day before the Aug. 16 announcement. Approval was expected since insiders representing nearly 50 percent of outstanding shares had already committed their shares in favor of the deal prior to the announcement. The company’s shares have stopped trading on the Nasdaq and will be delisted.

Chief Executive Samuel Lee, the largest shareholder with a nearly 24 percent stake, and director Dr. Jeereddi Prasad, the sixth largest shareholder at nearly 2 percent, and other insiders were expected to exchange most of their shares for a stake in the new ownership entity set up by Leonard Green.