Franklin, Tenn.-based Community Health Systems has completed or lined up multiple hospital sales this year as part of its divestiture plan, which aims to take in about $1 billion by offloading hospitals across various markets.
CHS has sold 29 hospitals since 2020, but its long-term debt still stands at about $11.5 billion, with its debt exposure driving its M&A strategy. Despite recent reductions, CHS still has one of the highest debts among health systems, and remains focused on deleveraging its balance sheet.
"We continue to make progress toward our $1 billion divestiture plan," CFO Kevin Hammons said during the company's third-quarter earnings call. "We anticipate the majority of the remaining transactions to complete this plan will likely be signed in the fourth quarter, with final closings carrying over into the first quarter of 2025."
Six things to know:
1. On Oct. 1, CHS sold Davis Regional Psychiatric Hospital and Davis Regional Medical Center in Statesville, N.C., to Iredell Health System. Iredell aims to keep the 42-bed behavioral health facility open and expand services at the acute care hospital. Financial terms of the deal were not disclosed.
2. CHS on Aug. 1 sold Tennova Healthcare-Cleveland (Tenn.) to Vitruvian Health in Dalton, Ga. Vitruvian, which rebranded from Hamilton Health Care System as part of its regional expansion plans, acquired the 351-bed for $160 million. CHS may receive an additional cash payment based on potential changes to certain supplemental reimbursement programs.
3. CHS plans to sell Merit Health Biloxi (Miss.), a 153-bed acute care hospital, to Gulfport, Miss.-based Memorial Health System. Memorial Health is a two-hospital system that has collaborated with Merit Health Biloxi across various service lines. Financial terms of the deal — which is expected to close in the first quarter — have not been disclosed.
4. CHS signed a definitive agreement in August to sell its three Pennsylvania hospitals to nonprofit WoodBridge Healthcare. The proposed $120 million deal would have seen CHS exit Pennsylvania but the deal collapsed in November. CHS said it is evaluating other options for the three-hospital system, Commonwealth Health.
5. In November, CHA entered into a definitive agreement to sell ShorePoint Health Port Charlotte (Fla.) and certain assets of ShorePoint Health Punta Gorda to Altamonte Springs, Fla.-based AdventHealth. The $265 million transaction is expected to close in the first quarter of 2025, pending regulatory approvals and closing conditions.
6. CHS signed a definitive agreement in November to sell Lake Norman Regional Medical Center in Mooresville, N.C., to Durham, N.C.-based Duke University Health System. Duke plans to acquire the 123-bed hospital for $280 million.