Community Health Systems (CHS) has reached an agreement to sell two of its hospitals in Yakima County, Washington, to Sunnyside Community Hospital & Clinics.
Sunnyside Community Hospital & Clinics will pay approximately $45 million, which includes working capital, for Yakima Regional Medical & Cardiac Center and Toppenish Community Hospital.
The transaction is expected to close in the second quarter of 2017.
CHS has divested from dozens of hospitals this year in numerous transactions as part of its efforts to trim massive amounts of debt. The deal is one of seven in the works for CHS, which announced in November that it would sell 17 hospitals for an estimated total of $1.2 billion. The company is sitting on approximately $15 billion in debt and said in April that it would explore the sale of up to 30 hospitals to help bring that figure down.
Financial woes for CHS began when it purchased Health Management Associates (HMA) for $7.5 billion in a deal that closed in 2014, Bloomberg reported. Prior to the sale, financial analysts recommended HMA, which had encountered financial problems of its own, to “take the money and run.” Now, CHS finds itself in a similar position and it remains to be seen whether CHS can keep its business afloat by selling off some of its hospitals.
In September, CHS confirmed that it was exploring a potential sale, although discussions with advisors were still in the early stages. However, it might be difficult for the embattled hospital operator to find a buyer with its mountain of debt. Admissions and operating revenues have been lower for CHS than they have on average for its competitors.