Community Health Systems Announces Definitive Agreement to Sell ShorePoint Health System in Florida

Rhea-AI Summary

Community Health Systems (NYSE: CYH) has announced a definitive agreement to sell ShorePoint Health facilities in Florida to AdventHealth for $265 million in cash, subject to adjustments. The sale includes ShorePoint Health Port Charlotte, certain assets of ShorePoint Health Punta Gorda (currently with suspended inpatient operations due to hurricane damage), and related ancillary businesses. The transaction is expected to close in Q1 2025, pending regulatory approvals and closing conditions.

Positive

• Sale agreement worth $265 million in cash, strengthening company's financial position
• Strategic divestiture aligned with previously announced portfolio optimization plans

Negative

• Punta Gorda facility's inpatient operations indefinitely suspended due to hurricane damage
• Loss of revenue-generating assets in the Florida market

Insights

Financial Analyst

This $265 million divestiture represents a significant strategic move for Community Health Systems, aligning with their ongoing portfolio optimization strategy. The sale of ShorePoint Health facilities to AdventHealth is particularly noteworthy given the suspended operations at Punta Gorda due to hurricane damage. Key implications:

• The transaction will strengthen CYH's balance sheet and provide additional liquidity
• The deal value represents approximately 51.6% of CYH's current market cap, making it a material transaction
• The extended closing timeline (Q1 2025) suggests complex regulatory requirements and operational considerations

The suspended operations at Punta Gorda likely impacted the valuation, but the cash consideration provides CYH with important financial flexibility for debt reduction or strategic reinvestment.

Healthcare Operations Expert

The acquisition by AdventHealth, a strong regional healthcare operator, indicates strategic value in these Florida assets despite operational challenges. The indefinite suspension of Punta Gorda's inpatient operations presents both risks and opportunities:

• AdventHealth can leverage its regional presence to potentially revitalize these facilities
• The Port Charlotte facility remains operational, providing immediate market presence
• Florida's growing demographic trends support long-term healthcare demand

This transaction reflects ongoing consolidation in the healthcare sector, with larger systems acquiring strategic assets to expand their geographic footprint and operational efficiency.

FRANKLIN, Tenn.--(BUSINESS WIRE)-- Community Health Systems, Inc. (NYSE: CYH) announced today that certain subsidiaries of the Company have entered into a definitive agreement to sell ShorePoint Health Port Charlotte in Port Charlotte, Florida, certain assets of ShorePoint Health Punta Gorda, in Punta Gorda, Florida, and certain ancillary businesses related to such facilities to subsidiaries of Adventist Health System Sunbelt Healthcare Corporation (AdventHealth) for $265 million in cash, subject to certain net working capital and other adjustments. Due to the effects of Hurricane Helene and Hurricane Milton, the Punta Gorda hospital has indefinitely suspended inpatient operations.

The transaction is expected to close in the first quarter of 2025, subject to regulatory approvals and closing conditions.

This transaction is among the additional potential divestitures discussed on the Company’s third quarter 2024 earnings call and in subsequent public appearances.

Cain Brothers, a division of KeyBanc Capital Markets, served as the exclusive financial advisor to AdventHealth on this transaction.

About Community Health Systems, Inc.

Community Health Systems, Inc. is one of the nation’s largest healthcare companies. The Company’s affiliates are leading providers of healthcare services, developing and operating healthcare delivery systems in 39 distinct markets across 15 states. The Company’s subsidiaries own or lease 69 affiliated hospitals with more than 11,000 beds and operate more than 1,000 sites of care, including physician practices, urgent care centers, freestanding emergency departments, occupational medicine clinics, imaging centers, cancer centers and ambulatory surgery centers.

The Company’s headquarters are located in Franklin, Tennessee, a suburb south of 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241121525399/en/

Media Contact:

Tomi Galin

Executive Vice President, Corporate Communications, Marketing and Public Affairs

(615) 628-6607

Investor Contacts:

Kevin Hammons

President and Chief Financial Officer

(615) 465-7000

Anton Hie

Vice President – Investor Relations

(615) 465-7012

Source: Community Health Systems, Inc.

FAQ

How much is AdventHealth paying for ShorePoint Health facilities from CYH?

AdventHealth is paying $265 million in cash for the ShorePoint Health facilities, subject to certain net working capital and other adjustments.

When is the CYH ShorePoint Health sale expected to close?

The sale is expected to close in the first quarter of 2025, subject to regulatory approvals and closing conditions.

Which ShorePoint Health facilities is CYH selling to AdventHealth?

CYH is selling ShorePoint Health Port Charlotte, certain assets of ShorePoint Health Punta Gorda, and related ancillary businesses in Florida.

Why are inpatient operations suspended at ShorePoint Health Punta Gorda?

Inpatient operations at ShorePoint Health Punta Gorda are indefinitely suspended due to the effects of Hurricane Helene and Hurricane Milton.