Healthcare Business News

CHS in lead position to buy bankrupt Mississippi hospital

By Bob Herman
Posted: July 14, 2014 - 2:30 pm ET

Community Health Systems is at the front of the line to acquire Natchez (Miss.) Regional Medical Center, a 155-bed, county-owned hospital that filed for bankruptcy this year.

Financial terms of the definitive asset purchase agreement were not immediately available, said CHS spokeswoman Tomi Galin. The deal will require a green light from the bankruptcy court and federal regulators, and the hospital will be also subject to an auction.

CHS becomes what is known as the stalking horse bidder in the auction, meaning others must top its bid to be considered.

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Scott Phillips, managing director of Healthcare Management Partners who advised on the deal, said the auction gives others an opportunity to purchase Natchez Regional. CHS' bid is $18 million at closing, and other potential buyers would have to bid at least $1 million more.

If approved, Franklin, Tenn.-based CHS would own both hospitals in Natchez, a city of about 15,500 people. CHS acquired 101-bed Natchez Community Hospital—located down the road from Natchez Regional—once it absorbed Health Management Associates in January.

Officials did not say if the hospitals would merge or what next steps would be. In a statement, CHS Chairman, President and CEO Wayne Smith said: “We look forward to completing this potential acquisition and working with the medical staffs and employees of both hospitals in Natchez in a coordinated approach to providing quality care for local residents.”

CHS is the largest health system in the country by hospital count, with 208 hospitals in 29 states. As part of the HMA merger, CHS still must divest the assets of two hospitals: 250-bed Riverview Regional Medical Center, Gadsden, Ala., and 116-bed Carolina Pines Regional Medical Center, Hartsville, S.C.

The Federal Trade Commission gave CHS six months to find approved buyers. Galin said there is no update on the status of those hospitals.

Follow Bob Herman on Twitter: @MHbherman

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