For-profit chain will use $425 million from Rockwood Health System deal to pare down its $15B debt burden.
Community Health Systems, Inc. continued its efforts to trim $15 billion in red ink with the sale of Rockwood Health System, a two-hospital system in Spokane, WA, to MultiCare Health System, in a deal valued at $425 million.
Facilities included in the deal include 388-bed Deaconess Hospital in Spokane, 123-bed Valley Hospital in Spokane Valley, and the multi-specialty Rockwood Clinic, all in Washington. The deal is expected to be finalized in the first quarter of 2017, CHS said in a news release.
The sale is the latest in a series of divestments that CHS CEO Wayne T. Smith announced in a conference call earlier this month with analysts.
CHS Negotiating Hospital Sales to Generate $1.2 Billion
"As we look to the future, we want to make sure we are in sustainable markets where we have good opportunities to deploy our resources and capital so that we can expand in those markets going forward," Smith told analysts.
"We will continue to evaluate our properties, in terms of ones that are beneficial."
The acquisition of Rockwood Health would help to expand access and build a stronger network of care in a service area that includes 1.5 million people in Eastern Washington, Northern Idaho, and Western Montana, said MultiCare CEO and President Bill Robertson.
"This is an important step for MultiCare, which will become the largest community-based, locally governed health system in the state when the transaction is complete," Robertson said.
"This acquisition will help the organization advance on our vision of becoming a Pacific Northwest system of care."
Rockwood Health System will become part of Tacoma, WA-based MultiCare's integrated not-for-profit healthcare system, which includes four acute-care adult hospitals, one acute-care children's hospital, and a robust network of community-based primary, specialty, and urgent care facilities.
Franklin, TN-based CHS, one of the largest publicly traded hospital companies in the nation, owns, leases or operates 158 hospitals in 22 states.