CHS agrees to sells Texas hospital to HCA
- Community Health Systems (CHS) on Tuesday announced it has signed a definitive agreement to sell Weatherford Regional Medical Center in Weatherford, Texas, to subsidiaries of HCA Healthcare.
- The deal is expected to close in the fall. Financial details were not disclosed.
- The agreement is part of CHS' 30 planned divestitures for this year. The system stated it currently operates, owns or leases 137 hospitals in 21 states.
Financial reports released in February noted the system had planned at least 25 divestitures this year, though CEO Wayne Smith mentioned in a May earnings call that more divestitures will be less of a focus for the system in the future.
The recent deals are part of a restructuring plan put in place to reduce about $15 billion debt — stemming in part from its 2014 purchase of Health Management Associates (HMA) for $7.5 billion. The company reported a $1.7 billion net loss last year.
The Weatherford deal is the latest in a string of asset sales so far this year. Last month, CHS announced it would sell five Pennsylvania hospitals to Reading Health System. In May, the Franklin, Tennessee-based operator completed the sale of eight hospitals to Massachusetts-based Steward Health Care and announced the sale of Lake Area Medical Center in Louisiana to CHRISTUS Health.
CHS also closed the deal for two of three divestitures it expects to sell to Curae Health. In April, the system completed the sale of Stringfellow Memorial Hospital. Before its earning call on May 2, the system announced the sale of Tomball Regional Medical Center and South Texas Regional medical Center to HCA.
CHS recently rejected a physician-led group's buyout offer for Lutheran Health Network, and since then two executives have been fired and one has resigned.
"Adding up the total hospital divestiture plan, it now encompasses 10 hospital transactions that include 30 hospitals of which 11 have recently closed, 12 are under definitive agreement and seven are under letter of intent," CEO Wayne Smith said during the earnings call. "These divestitures account for approximately $3.4 billion of annual revenue and mid-single digit EBITDA margins. Estimated gross proceeds from these divestitures including working capital are projected to generate $2 billion."
During the earnings call, Smith said, "There may be one or two more (divestitures), but we're not specifically thinking about doing anything significant for the rest of the year."
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