Investor-owned LifePoint Health has acquired St. Francis Hospital in Columbus, Ga., about a year after the independent hospital began seeking a suitor in light of debt problems and accounting irregularities flagged by the U.S. Department of Housing and Urban Development.
LifePoint paid off a $210 million HUD-backed mortgage at the center of the accounting issue as part of the deal, LifePoint Chief Financial Officer Leif Murphy said. The company also is assuming other debts, leaving St. Francis with a clean balance sheet going forward. Exact terms of the acquisition are not being disclosed, he said.
St. Francis, a 326-bed hospital about two hours southwest of Atlanta, used the HUD loan in 2011 to expand and renovate its campus, including completion of a new heart hospital and women's center, Murphy said. The acquisition gives Brentwood, Tenn.-based LifePoint a new hub in Georgia and a seasoned medical staff that the company can expand, he said. The hospital has annual revenue of about $330 million.
In late 2014, St. Francis had trouble servicing its debt, Murphy said. Accounting irregularities arose in November 2014 that HUD noted and later investigated through its inspector general's office. In September, that investigation resulted in a $21.4 million levy against St. Francis and orders to improve financial oversight.
Those issues cost the previous CEO and CFO their jobs. And they set in motion a search for a buyer. Murphy said 70-hospital LifePoint settled all HUD claims as part of its acquisition.
Piedmont Healthcare of Atlanta and Franklin, Tenn.-based Community Health Systems also made overtures for St. Francis. CHS ended up suing St. Francis last year for allegedly failing to inform CHS of the HUD investigation, a matter that Murphy said is expected to be resolved.
In a separate deal, Duke LifePoint Healthcare, a joint venture between LifePoint and Duke University Health System, bought two community hospitals in North Carolina from Tenet Healthcare Corp.
Duke LifePoint acquired 137-bed Central Carolina Hospital in Sanford and Frye Regional Medical Center in Hickory. Terms were not disclosed.
The two hospitals have combined annual revenue of about $330 million, Murphy said. With the deal, Duke LifePoint now own nine hospitals in North Carolina and five others out-of-state.
Duke LifePoint combines Duke's specialty care and clinical expertise with the resources and business systems that LifePoint can bring to bear. LifePoint shows financials from Duke LifePoint on its quarterly income statements and balance sheet. The 70 total hospitals owned by LifePoint include the hospitals from the Duke LifePoint partnership.