- Community Health Systems has signed a definitive agreement to sell Byrd Regional Hospital in Leesville, La., to Allegiance Health Management — the latest divestiture in an ongoing effort to reduce debt and focus on hospitals with growth potential.
- The deal, which is expected to close in the second quarter of this year, includes the 60-bed hospital and its associated assets.
- CHS CEO Wayne Smith told investors at the recent J.P. Morgan Healthcare Conference that his goal is to have about 100 hospitals in “significantly improved markets.” The Franklin, Tenn., company currently owns, operates or leases 127 hospitals in 20 states.
The Louisiana sale is second in the in less than a month for the hospital chain. On Jan. 31, the hospital operator announced a definitive agreement to sell Tennova Healthcare - Jamestown, an 85-bed facility in Jamestown, Tenn., to Rennova Health. That transaction is also expected to close in the second quarter.
CHS has been struggling with about $15 billion in debt and announced plans in 2016 to sell up to 30 hospitals to get that figure under control. The company’s fiscal difficulties stem from its $7.6 billion acquisition of Health Management Associates in 2014. HMA, which owned 23 hospitals and some clinics in Florida, was in financial distress itself at the time of the sale.
At the recent J.P. Morgan meeting, Wayne said hindsight has altered his view of that deal, according to Axios. “Based on the facts and circumstances at the time, I certainly would do the deal,” he said. “Based on a retro view of it, I wouldn’t do the deal.”
CHS netted $2 billion last year on the sale of 30 hospitals and is hoping to match that amount this year with the sale of additional assets.
The company ended the third quarter of fiscal 2017 with a net loss of $110 million on about $3.7 billion in revenue. Total debt was $13.8 billion, down from $14.8 billion in the second quarter.