As part of a debt-reduction campaign, Community Health Systems has agreed to sell an 80% stake in its home health division for $128 million to a subsidiary of Louisville, Ky.-based Almost Family.
The deal, announced Monday (PDF), is expected to be completed in the fourth quarter.
Almost Family is buying 74 home health and 15 hospice branch locations in 22 states from CHS. The CHS home health division has annual revenue of about $200 million.
When the deal is completed, Almost Family will operate 340 branches across 26 states with annual revenue expected to exceed $800 million.
"The transaction also advances our strategy to focus on a more sustainable and successful portfolio of hospitals and regional healthcare systems,” CHS CEO Wayne Smith said in a release.
The deal is the latest in a series of transactions that struggling CHS has undertaken to relieve some of the financial burden of $15 billion of debt CHS has accumulated over the past several years.
The biggest recent contributor to that debt was the $7.6 billion acquisition in 2014 of Health Management Associates, a 70-plus hospital merger that has yet to be fully integrated.
Earlier this month, Franklin, Tenn.-based CHS agreed to sell three rural hospitals in Mississippi and one in Florida.
It raised $1.2 billion 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 Quorum deal has come under fire from investors who say they were provided with misleading information about the financial condition of the company before it was spun off. A big Quorum investor, Q Investments, has called on the Quorum board of directors to investigate the transaction. Several class-action shareholder lawsuits have been launched against Quorum.
CHS has denied doing anything improper as part of the spinoff. The chain is the nation's second-largest investor-owned hospital company with 159 hospitals.
“This partnership with CHS may be the most strategic of all the investments we've made yet,” said Almost Family CEO William Yarmuth. “We believe it will enable us to see the healthcare continuum and home care specifically through the eyes of not only one of America's best hospital companies, but one of America's best healthcare companies.”