Franklin, Tenn.-based Community Health Systems reaffirmed their plan to sell $1 billion worth of hospitals on the system's July 25 earnings call.
Officials first discussed the plan in February. CEO Tim Hingtgen said the proceeds from those divestitures "enable a variety of positive activities such as targeted investments in core markets, funding potential future acquisitions, and increased flexibility in debt management."
CFO Kevin Hammons said on the July 25 call that they have a "handful of transactions that are in various stages of evaluation or negotiation."
Among those is a deal to sell Tennova Healthcare – Cleveland (Tenn.) to Dalton, Ga.-based Hamilton Health Care System for $160 million. Mr. Hingtgen said that the deal is on track and is expected to be completed in the third quarter.
"Additional transactions are underway, and we continue to carefully review inbound interest related to other markets," Mr. Hingtgen said.
CHS recently had a deal to sell two North Carolina hospitals to Winston-Salem, N.C.-based Novant Health collapse in the face of federal scrutiny. In June, Novant called off the deal that was first announced in 2023 after an appellate court granted the Federal Trade Commission an emergency injunction blocking the deal.
Mr. Hammons said he does not expect similar challenges on other deals currently in the works. Novant, he said, was an in-state buyer, but the group of buyers is now changing. Health systems are looking outside of their traditional service areas to expand.
"So as I look at the remaining opportunities and current deals that we're negotiating right now, the buyers are all out of market, typically out of state [...] so we really don't see any headwinds on being able to complete the other deals that we're currently working on," he said.
CHS announced July 30 it signed a definitive agreement to sell its three Pennsylvania hospitals to affiliates of WoodBridge Healthcare, a nonprofit organization led by healthcare veteran Joshua Nemzoff.
The system said in a news release that the three hospitals in the proposed $120 million are among the additional potential divestitures discussed on the earnings call.