From Illinois Business Journal news services
FRANKLIN, Tenn. – Community Health Systems, Inc. has announced plans to create a new publicly traded hospital company by spinning off to stockholders a group of 38 hospitals, including four in Southern Illinois.
Also to be spun off as part of the arrangement is Quorum Health Resources, LLC, a hospital management and consulting business. The new company will be named Quorum Health Corporation to leverage the existing strength of the Quorum brand, the company said. The spin-off is intended to be tax-free to Community Health Systems and its stockholders and is expected to be completed in the first quarter of 2016.
Among hospitals affected are:
– Gateway Regional Medical Center in Granite City
– Heartland Regional Medical Center in Marion
– Crossroads Community Hospital in Mount Vernon and
– Red Bud Regional Hospital in Red Bud
Quorum Health Corporation will be headquartered in middle Tennessee and will operate independently with its own board of directors and management team. It will include a diversified portfolio of 38 hospitals with an aggregate of 3,635 licensed beds across 16 states.
The hospitals that will comprise Quorum Health Corporation “have strong market positions” and are primarily located in cities or counties having populations of 50,000 or less,” Community Health Systems said in a statement. In 84 percent of these markets, the hospital is the sole provider of acute care hospital services. In 2014, The Joint Commission recognized 74 percent of the hospitals that will become part of Quorum Health Corporation as Top Performers in Key Quality Measures. The new company will also include Quorum Health Resources, which provides hospital management and consulting services to 150 non-affiliated hospitals across the United States, most of which are located in similar markets as Quorum Health Corporation’s sole provider hospitals.
In 2014, the businesses that will comprise Quorum Health Corporation generated unaudited annual net revenue of approximately $2.1 billion and adjusted EBITDA of approximately $255 million.
Among benefits of the transaction, the company said Quorum Health Corp. is expected to have an enhanced ability to drive growth by capitalizing on acquisition opportunities consistent with its portfolio, developing facility specific operating strategies aligned with its community needs and better leveraging its management and consulting capabilities.
Hospitals in Blue Island, Waukegan and Galesburg, Ill., are also affected, as are hospital properites in Alabama, Arkansas, California, Georgia, Kentucky, New Mexico, Nevada, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Utah and Wyoming.
Community Health Systems, Inc. is one of the largest publicly traded hospital companies in the United States and an operator of general acute care hospitals in communities across the country. Through its subsidiaries, the company currently owns, leases or operates 198 affiliated hospitals in 29 states with an aggregate of approximately 30,000 licensed beds. The Company’s headquarters are located in Franklin, Tennessee, a suburb of south Nashville. Shares in Community Health Systems, Inc. are traded on the New York Stock Exchange under the symbol “CYH.” More information about the company can be found on its website at www.chs.net.