Community Health Systems has reached a definitive agreement to buy Mercy Health System in northeastern Pennsylvania.
A subsidiary of the Franklin-based hospital chain will buy the three-hospital group from Cincinnati-based Catholic Health Partners for an as-yet undisclosed sum. The deal consists of 198-bed Mercy Hospital in Scranton, 48-bed Mercy Tyler Hospital in Tunkhannock, 67-bed long term acute care Mercy Special Care Hospital and other outpatient and ancillary services.
According to a news release in Scranton, CHS has agreed to at least $68 million in capital improvements for the system during its first three years of ownership, a $2 million donation to a newly created community health care foundation, and continuing all essential services at the hospitals for at least five years, among other terms.
“From a company perspective, we are excited about this opportunity to grow our presence in Pennsylvania,” said CEO Wayne T. Smith in a statement. “At the successful completion of this transaction, twelve Community Health Systems affiliated hospitals will be providing health services for communities across the state.”
In 2009 CHS acquired neighboring Wyoming Valley Health Care System for $271 million. The company had been pegged as a front-runner to buy Mercy since November.
The deal is subject to federal and state regulatory approvals, including the go-ahead from Pennsylvania’s Attorney General.