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.
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