In a deal that slimmed down one hospital chain and beefed up two others, Paracelsus Healthcare Corp. last week completed the sale of five Utah hospitals to Nashville-based Iasis Healthcare Corp. for $280 million and one hospital to Baton Rouge, La.-based Associates Capital Group for the assumption of $4.7 million of debt and other commitments.
The Houston-based company will use most of the cash to eliminate its senior bank debt but will set aside about $50 million for capital investments in its 10 other hospitals.
Paracelsus retains a 6% interest in the Utah hospitals, one of which has been shuttered since 1997. Iasis said it plans to reopen that hospital, Paracelsus Regional Hospital in Salt Lake City, by next year.
The other hospitals acquired by Iasis were 126-bed Davis Hospital and Medical Center in Layton, 50-bed Jordan Valley Hospital in West Jordan, and 127-bed Pioneer Valley Hospital and 138-bed Salt Lake Regional Medical Center, both in Salt Lake City.
The deal is the first of two multihospital acquisitions Iasis announced in August. It is backed by New York investment firm Joseph Littlejohn and Levy. A $520 million purchase of 10 hospitals in three states from Santa Barbara, Calif.-based Tenet Healthcare Corp. is also slated to close this month.
The acquisition of the Paracelsus hospitals was Iasis' first since the company was formed last year.
Separately, Paracelsus sold 52-bed Senatobia (Miss.) Community Hospital to Associates Capital Group, which assumed a $3 million capital lease and $1.7 million in notes for working capital and equipment. Associates Capital now owns at least two hospitals, including a 26-bed facility in Pikeville, Tenn., which it bought from Paracelsus in March and renamed Bledsoe Community Medical Center.
A Paracelsus spokeswoman would not comment on the company's progress in selling three of its 10 remaining hospitals, two in Tennessee and one in Georgia.