Two Fort Smith hospitals will be under new ownership when a deal by Community Health Systems Inc. to acquire Health Management Associates Inc. becomes final early next year.
The $7.6 billion acquisition, announced Tuesday, will bring Sparks Health System - which includes the 492-bed Sparks Regional Medical Center and Summit Medical Center, a 103-bed acute-care hospital - under the Tennessee-based Community Health Systems umbrella. The two hospitals serve a 12-county area near Fort Smith, including portions of Arkansas and Oklahoma.
Florida-based Health Management Associates said in April that it planned an expansion of a regional service center in Fort Smith, adding 300 employees to the more than 200 already there. A request to Community Health Systems for more information regarding plans for the center was not answered by late Tuesday afternoon.
The deal includes the assumption of $3.7 million in debt and when complete will make Community Health Systems one of the largest publicly traded hospital companies in the U.S. - 206 hospitals and 31,000 beds in 29 states, according to a news release Tuesday. The company also owns Northwest Health System, which operates Northwest Arkansas Medical Center in Bentonville, Northwest Arkansas Medical Center in Springdale and the Willow Creek Women’s Hospital in Johnson.
“This 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,” said Wayne Smith, chairman and chief executive of Community Health Systems in a statement.
The merger plan was unanimously approved by the company’s board of directors. The Health Management Associates board also accepted the deal unanimously and recommends the company’s shareholders do the same.
Community Health Systems will acquire all Health Management Associates stock for a combined cash and stock offer. The transaction is expected to close by the end of the first quarter of 2014 and requires several steps before finalization, including antitrust clearance and a 70 percent vote from Health Management Associates stockholders.
“Our agreement with CHS provides substantial value for our shareholders,” said William Schoen, chairman of the board of Health Management Associates in a statement.
Shares of Community Health Systems closed at $45.58, down $1.65 or 3.5 percent, in trading Tuesday on the New York Stock Exchange. Shares have traded between $22.93 and $51.29 over the past year.
Shares of Health Management Associates closed at $13.30, down $1.62 or nearly 11 percent in New York Stock Exchange trading. Shares have traded as low as $6.27 and as high as $17.28 over the past year.
Business, Pages 26 on 07/31/2013