Divestiture comes as the Franklin, TN-based company reportedly is up for sale and under financial duress, with stock prices tumbling 75% in the past year, and a $1.4 billion loss posted in the second quarter.
Community Health Systems, Inc. says it is selling four hospitals to Curae Health Inc., as part of a plan to reduce and refine its portfolio and pay down debt.
The announcement comes as the Franklin, TN-based company posted a $1.43 billion loss in the second quarter of fiscal 2016, and saw its stock prices tank by 75% over the past year.
Company shares sold for $42.24 on Oct. 7, 2015, but only fetched $11.24 on Sept. 29. Media outlets have reported that the for-profit Fortune 500 company is up for sale.
The hospitals in the deal are:
- 95-bed Merit Health Gilmore Memorial in Amory, MS
- 112-bed Merit Health Batesville in Batesville, MS
- 181-bed Merit Health Northwest Mississippi in Clarksdale, MS
- 126-bed Highlands Regional Medical Center in Sebring, FL
Financial terms were not disclosed for the deal, which is expected to be finalized by the end of the year.
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"We are highly invested in the success of our affiliated hospitals, and we are considering how to best position them for the future," Wayne T. Smith, chairman and CEO of Community Health Systems, Inc., said in remarks accompanying the announcement.
Curae Health is a 501(c)(3) not-for-profit health system that was formed to help address the needs of rural healthcare. The Clinton, TN-based system operates three hospitals in Alabama.
"These four hospitals provide quality care and are important in each of their communities," Smith said. "They will benefit from alignment with a smaller organization specializing in the operation of rural hospitals. Divestiture of these assets advances our strategy to focus on a portfolio of larger hospitals and regional healthcare systems."
CHS is one of the largest publicly traded hospital companies in the nation, and owns, leases, or operates 158 hospitals in 22 states with an aggregate of nearly 27,000 licensed beds.
Ascension Sells 2 Hospitals
St. Louis-based Ascension, the nation's largest non-profit and Catholic health system, is selling two hospitals to RCCH HealthCare Partners.
The sale of Lourdes Health in Pasco, WA, and St. Joseph Regional Medical Center in Lewiston, ID, had been part of a previously announced acquisition agreement with RCCH's predecessor Capella Healthcare in 2015. Financial terms were not disclosed.
Both hospitals will retain their faith-based status.
"RCCH works with communities to build strong local healthcare systems that are known for quality patient care, and its values align closely with those of Ascension," said Robert J. Henkel, president and CEO, Ascension Healthcare, a division of Ascension.
"In addition, RCCH has a strong presence in the region, and we are confident that joining RCCH will give Lourdes and St. Joseph the ability to faithfully serve individuals in the Pasco and Lewiston communities well into the future."
Ascension's Healthcare Division operates more than 2,500 care sites, including 141 hospitals and more than 30 senior living facilities in 24 states and the District of Columbia. Brentwood, TN-based RCCH provides services in 17 regional markets in 12 states.
"We look forward to becoming part of the Pasco and Lewiston communities and living up to the trust that Ascension and these hospitals have placed in us," said Marty Rash, executive chairman of RCCH.
"Our goals will include working together with healthcare professionals and community leaders, led by local boards that are 100% made up of community leaders and physicians, to ensure the continued provision of high-quality, compassionate healthcare and to expand and enhance services provided locally."