Community Health Systems Inc., based in Franklin, announced earlier this week that it will purchase Health Management Associates Inc. — parent company of Harton Regional Medical Center — for $7.6 billion, including about $3.7 billion in debt.
The transaction is expected to close by the end of the first quarter of 2014, and is subject to approval by a 70 percent vote of HMA’s stockholders, antitrust clearance, receipt of other regulatory approvals, and other conditions.
Upon completion of the purchase, Community Health will own or operate 206 hospitals in 29 states, with more than 31,000 beds, according to the company, including University Medical Center in Lebanon, Heritage Medical Center in Shelbyville, and Harton.
Last week, word leaked out that the hospital had been sold. When contacted by The News, however, Maryann Hodge, vice president of marketing communications for HMA, said, “It is truly a rumor. It has not been sold and there is no attempt to sell it. There’s no truth to it whatsoever .”
According to Wayne T. Smith, chairman, president and CEO of Community Health Systems, the “compelling transaction provides a strategic opportunity to form a larger company with a diverse portfolio of hospitals that is well positioned to realize the benefits of health care reform and to address the changing dynamics of our industry.
“Our complementary markets and the ability to form networks in key states, along with the synergies that will be available to us, can create value for the shareholders of our companies, the communities we serve, our employees and medical staffs.
“We look forward to working with the physicians and employees of HMA to advance the commitment shared across both organizations to pursue clinical excellence and to deliver quality care for patients.”
William J. Schoen, chairman of the board of Health Management Associates, said, “This agreement represents the successful conclusion of the strategic review process that our board of directors commenced at the end of last year, during which we evaluated several alternatives, including remaining independent and potential transactions with other strategic parties … We are pleased that this combination will create an even stronger organization for the benefit of our patients, physicians, associates and the communities we serve.”
Community Health Systems, Inc. is one of the largest publicly traded hospital companies in the United States and a leading operator of general acute care hospitals in non-urban and mid-size markets throughout the country.
Through its subsidiaries, CHS currently owns, leases or operates 135 hospitals in 29 states with an aggregate of approximately 20,000 licensed beds. Its hospitals offer a broad range of inpatient and outpatient medical and surgical services.
Health Management Associates Inc., headquartered in Florida, through its affiliates, owns and manages hospitals and ambulatory surgery centers in small cities and selected larger urban markets. HMA currently operates 71 hospitals in 15 states with approximately 11,000 licensed beds.
“ Understandably, a fair amount of attention has been paid to the planned combination of Health Management Associates, Harton Regional Medical Center’s parent company, and Community Health Systems (CHS). There are some important points about this combination that I wanted to share with Coffee County and the surrounding communities,” said Russ Spray, CEO of Harton Regional Medical Center. ” First, CHS desires to buy our parent company because it believes Health Management’s 71 facilities across the country, including Harton Regional Medical Center, are excellent hospitals.”
Secondly, Spray continued, it is not expected that the operations of Harton Regional Medical Center will be affected in any way for the foreseeable future.
“If anything, should the combination of our parent company with CHS occur, it will be very beneficial to all the hospitals involved – including Harton Regional Medical Center,” the Harton CEO said. “Together , I believe we will be part of an even stronger company which certainly benefits our community, our physicians, our associates, and most importantly our patients. We look forward to the combination and the opportunities it will present for all involved.”