Struggling Community Health Systems has agreed to sell three rural hospitals in Mississippi and one in Florida as part of its plan to pare debt and underperforming hospitals.
Not-for-profit Curae Health is buying 95-bed Merit Health Gilmore Memorial in Amory, Miss., 112-bed Merit Health Batesville (Miss.), 181-bed Merit Health Northwest Mississippi in Clarksdale, and 126-bed Highlands Regional Medical Center in Sebring, Fla.
CHS said it would use proceeds of the sales to reduce debt. Terms were not disclosed.
“Divestiture of these assets advances our strategy to focus on a portfolio of larger hospitals and regional healthcare systems,” said CHS CEO Wayne Smith. The deal is expected to be completed in the fourth quarter pending customary regulatory approvals, according to CHS.
Curae is based in Clinton, Tenn., and operates three hospitals in Alabama.
Franklin, Tenn.-based CHS, the nation's second-largest investor-owned hospital chain, is plagued by $15 billion in debt that is far higher than its peers. That's despite raising $1.2 billion earlier this year through a spinoff of 38 small and rural hospitals into Quorum Health Corp. and the $445 million sale of its stake in a four-hospital joint venture in Las Vegas.
The system has suffered an earnings and stock price slump since last fall. CHS is being dragged down by the performance of hospitals acquired in 2014 as part of its blockbuster $7.6 billion purchase of troubled Health Management Associates. CHS said this month it had found five buyers for 12 hospitals that it had for sale. Chief Financial Officer Larry Cash said it would raise $850 million from the sale of those hospitals.
