Healthcare Business News

Community Health Systems to lease Munroe Regional Medical Center

By Beth Kutscher
Posted: March 19, 2014 - 7:00 pm ET

Community Health Systems has signed an agreement to lease Munroe Regional Medical Center, a 420-bed hospital in Ocala, Fla., committing to an investment of about $425 million over the initial five years of the 40-year lease.

CHS will pay about $200 million to operate Munroe through a 40-year lease, and invest $150 million in capital improvements for its healthcare facilities. Another $75 million will be invested in equipment, physician recruitment and new services over the first five years of the transaction.

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The lease will begin in the second quarter, pending regulatory approval.

The Franklin, Tenn.-based chain is executing a deal set in motion by Health Management Associates, which it acquired in January in a $3.9 billion transaction. HMA last April outbid Duke LifePoint Healthcare with an offer for Munroe Regional that included $212 million in cash and $225 million in capital commitments over the first five years and 4% of net revenue in years six to 10. The chain also pledged $1.5 million in charitable donations.

The two parties signed a letter of intent in June.

The deal also calls for Munroe Regional to form a clinical affiliation with UF Health Shands Hospital, a longtime HMA partner. The deal will bring CHS' hospital count to 26 in Florida.

Follow Beth Kutscher on Twitter: @MHbkutscher

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