WoodBridge Healthcare, a nonprofit organization led by healthcare veteran Joshua Nemzoff, plans to acquire Commonwealth Health, a three-hospital system part of Franklin, Tenn.-based Community Health Systems.
Eight things to know:
1. The proposed $120 million transaction would see CHS exit Pennsylvania. The deal includes a $10 million prepayment for services to be provided subject to an IT transition services agreement and adjustment for the assumption of any capital/finance leases and net working capital.
2. Commonwealth Health hospitals include:
- Regional Hospital of Scranton (186 beds)
- Moses Taylor Hospital in Scranton (122 beds)
- Wilkes-Barre General Hospital (369 beds)
3. WoodBridge Healthcare intends to use bond financing debt to acquire the hospitals. The Wilkes-Barre Finance Authority issued a public notice outlining how it would act as the financing system to issue up to $180 million in tax-exempt revenue bonds on behalf of WoodBridge.
4. The nonprofit plans to use the funds to acquire Commonwealth Health. It will also renovate, expand and upgrade the facilities and create a debt-service reserve fund and pay costs of issuance of the bonds.
5. A spokesperson for WoodBridge told Becker's the organization is conducting a review of the facilities' capital needs. "Based on this assessment, we will develop a five-year plan that includes a substantial capital investment in facilities and equipment as well as property, plant and specifically, major moveable equipment."
6. WoodBridge said it was formed to help providers maintain local access to care in a nonprofit setting. "The healthcare industry, both nationally and regionally, is rapidly transforming with new market entrants, changing care models and cost inflation outpacing revenue," a spokesperson told Becker's. "Hospitals and health systems are often realigned in order to succeed. WoodBridge made the decision to pursue Commonwealth Health to ensure the health system can continue providing access to high-quality care in the region for years to come."
7. WoodBridge said it aims to further the system's mission of meeting the region's evolving health needs in a compassionate, collaborative and cost-effective manner. "WoodBridge will work to enhance community health, partner with local organizations to address care gaps, and use hospital resources to provide consistent, tailored care directly to the people who need it."
8. The transaction is expected to close in the fourth quarter, pending regulatory approvals and closing conditions.