Almost a year after emerging from bankruptcy, Quorum Health announced it has sold its consulting division to a private equity firm.
The Brentwood, Tenn.-based rural and mid-sized market hospital operator sold a majority stake in its advisory and outsourced services subsidiary, QHR Health, to Grant Avenue Capital, a healthcare-focused private equity firm in a deal that took effect May 28.
Quorum CEO Dan Slipkovich said in a statement that the sale will allow the company to focus on its primary goal of building out the hospital system, both by capturing market share in existing locations and through strategic acquisitions.
"This transaction positions QHC to refocus on our core operations," he said. "The capital generated by the transaction will allow us to accelerate certain high priority projects and capital investment to expand health services in our existing markets and invest in new market opportunities."
Quorum announced in July 2020 it had met a $500 million debt reduction target outlined in its restructuring agreement after filing for bankruptcy three months earlier. The company also said it had refreshed its board and named Joey Jacobs its new interim CEO. Slipkovich replaced Jacobs just two months later.
The parties declined to share terms of the deal, including transaction price. Grant Avenue Capital said this marks its seventh corporate carve-out since its launch in 2019. Grant Avenue typically targets companies generating $5 million to $25 million in earnings before interest, taxes, depreciation and amortization. In addition to Grant Avenue's majority stake, Nashville Capital Network and Brentwood Capital Partners also bought stakes in QHR Health, also known as Quorum Health Resources.
"We believe in the importance of QHR Health's vision to strengthen independent community healthcare," Buddy Gumina, founder and managing partner of Grant Avenue Capital, said in a statement. "We look forward to partnering with the QHR Health management team and expanding the platform's breadth of services to support their clients' mission of providing access to excellent local healthcare in the communities they serve."
QHR Health will continue to operate from its Brentwood headquarters, and will continue to provide Quorum Health with supply chain support and other consulting services.
QHR Health, which was founded in 1977, provides management advisory services, revenue cycle management, supply chain optimization, outsourced IT services and strategic consulting, according to a press release.
Its former parent company, Quorum Health has a portfolio of 22 affiliated hospitals across 13 states with an aggregate of 1,817 licensed beds.
