USC has purchased Verdugo Hills Hospital and promises to spend $30 million to upgrade the Glendale facility.

The private university and the non-profit hospital have been in discussions about a possible merger since June 2012. Officials said the reason for the talks was the changing economics of health care under the Affordable Care Act, which limits growth of Medicare payments and could adversely affect small hospitals such as Verdugo Hills, which has 158 beds. USC officials said the acquisition would create an organization large enough to remain viable and competitive.

“This was the right move for both organizations, particularly in light of the changes that are transforming health care,” Tom Jackiewicz, chief executive of USC Health, said in a statement. “Bringing together these two very strong provider organizations creates a unique opportunity for residents in the Foothill communities to receive exceptional patient care from the physicians they know and trust, and from those who bring additional medical expertise from one of the world’s leading academic medical centers.”

The purchase price was not disclosed. The facility’s new name is USC Verdugo Hills Hospital.

The hospital will be managed by Keck Medicine of USC, a system that includes the 471-bed Keck Medical Center of USC, the USC Norris Comprehensive Cancer Center, USC University Park campus and clinics in Beverly Hills, downtown Los Angeles, La Cañada-Flintridge and Pasadena.

USC has already made investments in the hospital’s exterior signage, landscaping and lobby. More improvements and additional clinical services will be announced in coming months, the university said in a statement.