Fresh from completing its acquisition of Mercy Health Partners in the Knoxville area, Health Management Associates has recruited Mike Garfield, a regional operations executive from Community Health Systems, to be its CEO in East Tennessee. Garfield, a native of Bristol, had joined CHS in 2009 after spending much of his career at HCA, where he was among other things CEO of Skyline Medical Center and COO of Centennial Medical Center.
SEE ALSO: CHS CFO Larry Cash's comments earlier this year that Mercy was a system CHS "should have and would have had."
Community Health Systems has closed on its acquisition of three-hospital Mercy Health Partners in Scranton, Pa. The deal, which has been valued at $150 million, includes two general acute care facilities — 198-bed Regional Hospital of Scranton and 48-bed Tyler Memorial Hospital in Tunkhannock — and 67-bed long term acute care Special Care Hospital in Nanticoke.
CHS now owns 13 acute care hospitals in the Keystone State.
Community Health Systems this morning revealed the new names for the three hospitals of Mercy Health Partners, a Scranton, Pa. CHS is paying $150 million for the hospitals and will officially take control of them on May 1.
The new names, from a local report:
Mercy Hospital in Scranton will now be known Regional Hospital of Scranton, Mercy Tyler near Tunkhannock will revert back to Tyler Memorial and Mercy Special Care in Nanticoke will be known as Special Care Hospital.
Community Health Systems has received the go-ahead to buy Mercy Health Partners in Pennsylvania for $150 million. The price tag was revealed Monday when a Pennsylvania judge approved the sale of the Catholic health system to CHS. The Franklin-based hospital operator also has agreed to invest $68 million in Mercy over the next five years.
Community Health Systems' planned acquisition of Mercy Health Partners will go before a county judge in Pennsylvania on Monday. The court's approval is required for the nonprofit entity to sell to the for-profit, Franklin-based hospital operator.
Separately, Pennsylvania press reported that the Sisters of Mercy began moving out of one of the buildings that CHS would acquire with the purchase:
CHS spokeswoman Tomi Galen said the for-profit had no involvement in "any discussions or decisions about the sisters' relocation." She added that it was too soon to say what the building will be used for after the sale is finalized.
"We have not evaluated the properties or made any plans," she said.
(Yes, we know they spelled her name wrong.)
"Scranton is a three-hospital town that only needs two hospitals," Mr. Nemzoff said. And if the sale to CHS goes through, there will be "an 800-pound gorilla in town looking for bananas."and:
When all three of Scranton's hospitals are struggling to come up with the cash necessary for capital improvements, "they were all sinking at the same rate," Mr. Nemzoff said. But if CHS comes in with millions of dollars for capital improvements at Mercy Hospital, it could take a big bite out of the other hospitals' market share and their ability to remain competitive. "CHS changes the paradigm," Mr. Nemzoff said.
The bull-case for CYH remains grounded in the potential takeout of THC and the significant EPS power generated from the deal ($4.50+ EPS). We think as long as the market continues to view this deal with a high probability of success, our view is that CYH shares can likely move easily toward $45 (10x newco EPS).