CHS anticipates putting more hospitals on the block
- Community Health Systems, which already has 12 hospitals up for sale, is likely to sell even more than those by the end of the year, Chief Financial Officer Larry Cash said Wednesday during the Wells Fargo Securities Healthcare Conference in Boston.
- Cash told analysts the system has received interest in more of its 159 hospitals but did not say which ones are being discussed.
- The dozen hospitals already for sale are expected to go in a set of five transactions that will bring in an estimated $850 million in net proceeds.
The sales come as part of CHS' strategy to focus on strengthening its regional hubs, which it outlined for investors in June, as well as reduce its debt.
Currently, the system has 159 hospitals dotted across 22 states, but more than half its revenue is generated by just 83 of those hospitals located in Tennessee, Florida, Pennsylvania, Texas, and Indiana. CHS said in June that 73 of those hospitals operate around 11 hubs where the system aims to build up services and enhance some specialties. Cash specifically added Wednesday that CHS, which has 57 free-standing surgery centers, intends to acquire more by the end of the year.
The system recently completed other major sales. In April it finished spinning off 38 hospitals into an independent company named Quorum Health Corp., and in May it sold its share of a four-hospital joint venture.
CHS has struggled financially due lower earnings and to low margins at the Health Management Associates hospitals it bought in 2014, which dropped the system's stock price from $60 per share last year to less than $11 Tuesday.
- Modern Healthcare CHS will sell more than the 12 hospitals currently on the market
- Wells Fargo 2016 Wells Fargo Healthcare Conference