FRANKLIN, Tenn. - Community Health (NYSE:CYH) Systems, Inc. (NYSE: CYH) has reached a definitive agreement to sell Tennova Healthcare – Cleveland, a 351-bed hospital in Cleveland, Tennessee, along with certain related businesses, to Hamilton Health Care System, Inc. affiliates.
The cash transaction, announced today, is valued at $160 million, subject to adjustments related to net working capital and other factors. The deal also includes the possibility of additional payments contingent on changes to specific supplemental reimbursement programs.
The expected closure of the sale is slated for the third quarter of this year, pending customary regulatory approvals and closing conditions. This divestiture was among those mentioned as potential during the company's fourth quarter and year-end 2023 earnings call.
Community Health Systems, Inc., headquartered in Franklin, Tennessee, is one of the nation's major healthcare providers, operating a network of healthcare services in 40 markets across 15 states. The company's subsidiaries manage 71 affiliated hospitals with approximately 12,000 beds and over 1,000 care sites, including physician practices, urgent care centers, and other outpatient facilities.
Shares of Community Health Systems, Inc. are publicly traded on the New York Stock Exchange. This transaction aligns with the company's strategic plan to optimize its portfolio and focus on markets where it can effectively drive growth and improve healthcare services.
The information for this article is based on a press release statement from Community Health Systems, Inc.
InvestingPro Insights
As Community Health Systems, Inc. (NYSE: CYH) proceeds with its strategic divestiture plan, the company's financial health and market performance remain critical for investors. The latest data from InvestingPro shows a market capitalization of $369.54 million, reflecting the company's current valuation in the market.
Despite its significant presence in the healthcare industry, Community Health Systems has been contending with financial challenges, as evidenced by a negative price-to-earnings (P/E) ratio of -2.73.
This indicates that the company is not currently generating net income, which aligns with InvestingPro Tips highlighting that analysts do not expect the company to be profitable this year and that it has not been profitable over the last twelve months.
InvestingPro Tips also point out that Community Health Systems operates with a significant debt burden and is quickly burning through cash. These factors are pertinent for stakeholders considering the impact on the company's liquidity and long-term sustainability. Furthermore, the InvestingPro Fair Value estimate stands at $4.21, offering a perspective on the company's potential value compared to its current trading price.
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