CHS to sell two Arkansas hospitals to Little Rock's Baptist Health
Community Health Systems announced Wednesday it plans to sell two of its Arkansas hospitals and their associated operations to not-for-profit Baptist Health in Little Rock.
The Franklin, Tenn.-based for-profit hospital chain has signed a definitive agreement to sell 492-bed Sparks Regional Medical Center in Fort Smith and 103-bed Sparks Medical Center in Van Buren, which together with their physician clinics and outpatient services comprise Sparks Health System. CHS said in a news release the hospitals were among the planned divestitures referenced in the company's first quarter earnings report in May.
The parties expect the deal to close in the fourth quarter of 2018 pending regulatory approvals and closing conditions. CHS, which has 119 hospitals in 20 states, will still own six hospitals in Arkansas once the deal is completed.
Nine-hospital Baptist Health, a faith-based, Christian organization, wrote in a news release that it has more than 9,300 employees, and Sparks Health System has about 2,000.
"Baptist Health has a proven track record of supporting Arkansas communities and expanding access to the highest quality care available, and this venture is a huge win for this region," Brandon Bullard, Sparks' interim CEO, said in a statement. "Baptist Health has a strong reputation for innovative health and wellness initiatives that are helping communities live healthier lives."Sparks serves more than 350,000 people in an 11-county region, and its Fort Smith hospital became the state's first hospital in 1887.
Baptist spokesman Mark Lowman declined to provide the terms of the deal, including financial details. He said the transaction would likely involve transitioning the hospitals into not-for-profit entities.
CHS announced in its first quarter earnings report that it signed definitive agreements to sell six hospitals in Tennessee, Louisiana and Florida, and that it expected those divestitures to contribute about $1 billion in net revenue this year. The Sparks hospitals were not named specifically in the report, as they were among a group of unannounced deals CHS said it was making progress on as it works to strengthen its portfolio.
CHS divested 30 hospitals in 2017, bringing its long-term debt to $13.9 billion at the end of the year, down from $14.8 billion at the end of 2016. It has since brought that down to $13.6 billion using debt exchanges.
CHS will release its second quarter earnings on July 26 and will host an earnings call the following day. A spokeswoman for CHS did not respond to a request for comment.
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