Tuesday, Community Health Systems, Inc. (CYH), a general hospital healthcare services provider, announced the execution of a definitive agreement to sell nine hospitals to Capella Healthcare, Inc., a privately held, for-profit hospital company headquartered in Franklin, Tennessee. The total purchase price for the deal, which is structured as a sale of stock is $315 million. The deal is subject to closing conditions for a transaction of this size and is expected to close on January 31, 2008.
The Franklin, Tennessee-based hospital company said the hospital that are up for sale are: 150-bed Hartselle Medical Center at Hartselle, AL, 89-bed Jacksonville Medical Center at Jacksonville, AL, 108-bed Parkway Medical Center located at Decatur, AL, 100-bed Woodland Medical Center at Cullman, AL, 156-bed National Park Medical Center situated at Hot Springs, AR, 170-bed St. Mary's Regional Medical Center at Russellville, AR, 135-bed Mineral Area Regional Medical Center located at Farmington, MO, 60-bed White County Medical Center situated at Sparta, TN and finally 80-bed Willamette Valley Medical Center located at McMinnville, OR.
Community Health Systems said, for the last 12 months ended September 30, 2007, the hospitals generated a total of about $420 million net revenue. The hospitals in the deal are a mix of Triad acquisition facilities and existing company facilities.
Wayne Smith, Chairman, President and Chief Executive Officer of Community Health Systems, said, "We are proud of each of these facilities and very respectful of the contributions made by their dedicated employees, medical staff members and leadership teams to the growth and success of our organization, we know that these facilities will continue to flourish and admirably serve their patients and communities under the Capella Healthcare banner. With this transaction, Capella is getting a fine group of properties while we have the opportunity to reduce our outstanding debt and devote more concentrated operating energies to the balance of our hospital portfolio."
CYH finished Tuesday's regular trading at $30.77, up $0.65 or 2.16%, on a volume of 495,900 shares on the NYSE. However, in after-hours trading, the stock slipped $0.15 or 0.50%, and was at $30.62.
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