Brentwood-based Community Health Systems (CYH) [2] has agreed to acquire the 183-bed Chestnut Hill Hospital, located in the northwest corner of Philadelphia and currently owned and operated by Chestnut Hill HealthCare, a local not-for-profit corporation.
The transaction also includes a rehabilitation facility and an assisted living facility. The University of Pennsylvania Health System will have a 15% minority interest in this transaction.
In October, Nashville-based Vanguard Health Systems reportedly pulled out of talks to buy Chestnut Hill.
According to a Dec. 30 posting on Philly.com, Moody’s Investors Service downgraded the hospital’s $25.7 million in bond debt to a low-medium-grade “Baa3” rating, due to the hospital’s persistent operating losses, modest liquidity and increased pension funding requirements. At the time of the downgrade, Moody’s raised concerns about the possibility that this acquisition could be delayed or called off. However, Moody’s noted that anticipated proceeds from the sale, if completed, are expected to be enough to repay bondholders.
Community Health owns, leases or operates 71 hospitals in 22 states.
The company announced the deal after the market closed. Shares of Community Health were up 22 cents to close at $22.47 Thursday.