Community Health Systems sells three hospitals to Tampa General for $290M
President and CFO Kevin Hammons says the company is continuing to gauge interest from outside parties related to future divestitures.
Photo: Martin Barraud/Getty Images
Subsidiaries of Franklin, Tennessee-based Community Health Systems have agreed to sell three Florida hospitals to Tampa General Hospital in a deal estimated to be worth $290 million, with the transaction expected to close later this year.
The hospitals are 120-bed Bravera Health Brooksville in Brooksville, 128-bed Bravera Health Seven Rivers in Crystal River and 124-bed Bravera Health Spring Hill in Spring Hill.
WHAT'S THE IMPACT?
Upon sale, CHS will receive $280 million in cash considerations excluding anticipated purchase price adjustments for net working capital and the amount of capital leases assumed by the buyer. Total cash consideration to be received, inclusive of these items, is estimated to be approximately $290 million.
In CHS' most recent earnings call, CEO Tim Hingtgen pointed to growth during the first quarter suggesting that "core demand for health services is returning," but acknowledged that there were headwinds affecting the company's earnings, including payer mix changes and increased medical specialist fees.
Hingtgen pointed to certain capital investments that were designed to further develop CHS' strongest markets, including the opening of a 112-bed expansion in the Naples, Florida, health system; the opening of a new surgery center and freestanding ER serving the Birmingham, Alabama, market; and major bed expansions and facility improvements in Foley, Alabama, Warsaw, Indiana and Knoxville, Tennessee.
CHS president and Chief Financial Officer Kevin Hammons highlighted a couple of recent transactions during the earnings call, including a definitive agreement to sell the company's facility in El Dorado, Arkansas.
"We remain engaged in continuing discussions about other potential transactions, which if they come to fruition, could provide opportunities to pay down debt," said Hammons.
"As we assess the opportunities to evolve our portfolio for growth and success, we continue to evaluate interest from outside parties related to potential divestitures as well as considering opportunities to expand our portfolio," he said.
THE LARGER TREND
CHS develops and operates healthcare delivery systems in 43 distinct markets across 15 states.
Its subsidiaries own or lease 77 affiliated hospitals with approximately 13,000 beds and operate more than 1,000 sites of care, including physician practices, urgent care centers, freestanding emergency departments, occupational medicine clinics, imaging centers, cancer centers and ambulatory surgery centers.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
