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For-profit hospital operator M&A update: 13 latest deals involving CHS, Tenet, HCA and LifePoint

Four of the largest for-profit hospital operators have each entered into several transactions this year. Some of the companies are selling off facilities to strengthen their hospital portfolios, while others are exploring ways to expand their reach.

Here's a breakdown of the transactions the for-profit hospital companies have entered into so far this year.

Community Health Systems

After selling off 30 hospitals in 2017, Franklin, Tenn.-based Community Health Systems announced late last year it intends to sell a group of hospitals with combined revenue of $2 billion. During the first four months of 2018, CHS sold one hospital and signed definitive agreements to sell six others.

CHS signed a definitive agreement in late January to sell Tennova Healthcare-Jamestown (Tenn.) to West Palm Beach, Fla.-based Rennova Health. Rennova announced earlier this month it expects the deal to close on June 1. In February, CHS agreed to divest Leesville, La.-based Byrd Regional Hospital to Allegiance Health Management in Shreveport, La. CHS agreed in March to sell three of its Tennessee hospitals to Jackson-based West Tennessee Healthcare.

CHS completed the sale of Bayfront Health Dade City (Fla.) to Altamonte Springs, Fla.-based Adventist Health System on April 1. Later that month, CHS entered into a definitive agreement to sell Ocala, Fla.-based Munroe Regional Medical Center. Orlando-based Florida Hospital, a subsidiary of Adventist Health System, will assume the lease and operations of the 421-bed hospital.

CHS is using the proceeds from the transactions to reduce its debt load. CHS' long-term debt totaled $13.86 billion as of March 31, a slight decrease from $13.88 billion as of the end of last year.

HCA Healthcare

Nashville, Tenn.-based HCA Healthcare has entered into a few transactions so far this year. In February, HCA expanded its market presence in Georgia when it acquired Savannah-based Memorial Health, which includes a 612-bed academic medical center and primary and specialty care network. The company now has eight hospitals in Georgia.

In late March, HCA announced it was looking to expand into North Carolina with the acquisition of Mission Health, a six-hospital, nonprofit system based in Asheville, N.C. The two parties signed a letter of intent and are currently negotiating a definitive agreement. Under the proposed transaction, HCA would use Mission Health as its platform for growth and expansion across the state.

In April, Austin, Texas-based St. David's HealthCare, which is jointly owned by HCA and two nonprofit foundations, acquired The Austin Diagnostic Clinic, a physician group with nine locations.

LifePoint Health

Brentwood, Tenn.-based LifePoint Health has engaged in far fewer transactions than the other major for-profit hospital operators this year.

In March, the company said it is selling three Louisiana hospitals to Allegiance Health Management in Shreveport, La. Under the deal, LifePoint will sell the following hospitals to AHM: Mercy Regional Medical Center in Ville Platte, La.; Acadian Medical Center in Eunice, La.; and Minden (La.) Medical Center.

Once the transaction is completed, LifePoint will only have one hospital in Louisiana: Teche Regional Medical Center in Morgan City.

Tenet Healthcare

After reporting a net loss in the third quarter of 2017, Dallas-based Tenet Healthcare launched a $150 million enterprisewide cost reduction initiative. In December, the company expanded the plan, which involves cutting jobs, renegotiating contracts with suppliers and vendors, and divesting hospitals in non-core markets, to $250 million.

Tenet's hospital divestiture plan is expected to yield more than $1 billion of proceeds. A presentation published with the company's first-quarter financial results said Tenet received approximately $550 million from divestitures in the first quarter of this year.

In January, Tenet announced plans to sell St. Louis-based Des Peres Hospital to St. Luke's Hospital in Chesterfield, Mo. That transaction closed May 1. Tenet entered into a definitive agreement to sell its last two Philadelphia hospitals to American Academic Health System, an affiliate of El Segundo, Calif.-based Paladin Healthcare, in 2017, and the transaction was completed in January. In March, Tenet divested MacNeal Hospital in Berwyn, Ill., and sold its minority interest in four Texas hospitals.

More articles on healthcare industry transactions:

Northwestern, Centegra seek to finalize 10-hospital merger
ProMedica to acquire nursing home chain — creating $7B health network
KentuckyOne Health sells 25-bed critical access hospital

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