CHS Sells Houston Hospitals to HCA for $750M

TL;DR

CHS selling Houston hospitals to HCA for $750M, filing confirms deal details.

AI Summary

On July 30, 2024, Community Health Systems, Inc. entered into a material definitive agreement related to its previously announced sale of hospitals in the Houston market to HCA Healthcare, Inc. for approximately $750 million. The filing also includes financial statements and exhibits related to this transaction.

Why It Matters

This divestiture signals a strategic shift for Community Health Systems, potentially impacting its market presence and financial structure as it focuses on other areas.

Risk Assessment

Risk Level: medium — The sale of significant assets can introduce financial and operational risks, as well as potential integration challenges or market adjustments.

Key Numbers

• $750 million — Sale Price (Agreed upon price for the sale of hospitals in the Houston market to HCA Healthcare.)

Key Players & Entities

• Community Health Systems, Inc. (company) — Registrant
• HCA Healthcare, Inc. (company) — Acquiring party
• $750 million (dollar_amount) — Sale price of Houston hospitals
• July 30, 2024 (date) — Date of material definitive agreement

FAQ

Key Financial Figures

• $120 million — es at the closing of the Transaction is $120 million (inclusive of a $10 million prepayment
• $10 million — saction is $120 million (inclusive of a $10 million prepayment for services to be provided

Filing Documents

• cyh-20240730.htm (8-K) — 50KB
• cyh-ex2_1.htm (EX-2.1) — 631KB
• cyh-ex99_1.htm (EX-99.1) — 11KB
• img258662259_0.jpg (GRAPHIC) — 17KB
• 0000950170-24-088004.txt ( ) — 917KB
• cyh-20240730.xsd (EX-101.SCH) — 23KB
• cyh-20240730_htm.xml (XML) — 4KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. On July 30, 2024, CHS/Community Health Systems, Inc. ("CHS"), a wholly-owned subsidiary of Community Health Systems, Inc. (the "Company"), and certain wholly-owned subsidiaries (the "Selling CHS Entities") of CHS, entered into an Asset Purchase Agreement (the "Purchase Agreement") with WoodBridge Healthcare, Inc. and certain of its affiliates (collectively, the "Purchaser"). Pursuant to the Purchase Agreement, and subject to the terms and conditions set forth therein, Purchaser has agreed to acquire (i) substantially all of the assets, and assume certain liabilities, from the Selling CHS Entities, and (ii) the equity interests of certain subsidiaries held by the Selling CHS Entities, in any such case, related to the following acute care hospitals and certain related businesses: (i) Regional Hospital of Scranton in Scranton, Pennsylvania, (ii) Moses Taylor Hospital in Scranton, Pennsylvania and (iii) Wilkes-Barre General Hospital in Wilkes-Barre, Pennsylvania (the transactions contemplated by the Purchase Agreement, the "Transaction"). The total purchase price payable by Purchaser to the Selling CHS Entities at the closing of the Transaction is $120 million (inclusive of a $10 million prepayment for services to be provided to the Purchaser by an affiliate of the Selling CHS Entities pursuant to an information technology transition services agreement (the "Transition Services Agreement")), payable in cash at closing, and subject to adjustment based on closing net working capital and the amount of any capital/finance leases assumed by Purchaser. The Purchase Agreement contains various representations, warranties and covenants made by the parties. The Purchase Agreement also provides for indemnification by the parties with respect to breaches of representations, warranties and covenants by such parties, as well as with respect to certain other indemnifiable matters specified in the Purchase Agreement. The closi

01 Other Events

Item 8.01 Other Events. On July 30, 2024, the Company issued a press release announcing the entry of the parties into the Purchase Agreement. A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Forward-Looking Statements

Forward-Looking Statements This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 that involve risk and uncertainties. These forward-looking statements are based on the Company's current beliefs, understandings and expectations. These forward-looking statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond the Company's control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied include: (i) the parties to the Purchase Agreement may be unable to complete the Transaction in a timely manner or at all, because, among other reasons, conditions to the closing of the Transaction set forth in the Purchase Agreement may not be satisfied or waived; (ii) uncertainty as to the timing of completion of the Transaction; (iii) the occurrence of any event, change or other circumstances that could give rise to the termination of the Purchase Agreement; (iv) risks related to disruption of management's attention from the Company's ongoing business operations; (v) the outcome of any legal proceedings to the extent initiated against the parties to the Purchase Agreement or otherwise related to the Transaction; (vi) post-closing risks related to the Transition Services Agreement and ancillary agreements to be entered into at closing as noted above; and (vii) the ability of the Company to execute on its strategy and achieve its goals and other expectations after completion of the Transaction, as well as the risks set forth in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the "SEC

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit Number Description 2.1 Asset Purchase Agreement, dated as of July 30, 2024, by and among CHS/Community Health Systems, Inc., certain subsidiaries of CHS/Community Health Systems, Inc., and WoodBridge Healthcare, Inc. and certain of its affiliates* 99.1 Community Health Systems, Inc. Press Release dated July 30, 2024 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish, on a supplemental basis, a copy of such omitted schedules and exhibits to the Securities and Exchange Commission upon request.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. COMMUNITY HEALTH SYSTEMS, INC. (Registrant) Date July 30, 2024 By: /s/ Tim L. Hingtgen Tim L. Hingtgen Chief Executive Officer and Director (principal executive officer)

View Full Filing

View this 8-K filing on SEC EDGAR