Dive Brief:
Ascension Health has inked a definitive agreement to acquire full ownership of a Texas hospital and its ancillary businesses from Community Health Systems for $460 million, the health system said Tuesday.
Ascension Seton, a subsidiary of Ascension Texas, will purchase the remaining 80% stake in 126-bed Cedar Park Regional Medical Center. Although the system already owned a minority interest in Cedar Park, Ascension said acquiring full ownership would represent a “significant step” toward expanding medical services and care access in the Central Texas community.
The deal is expected to close this summer, subject to regulatory approvals.
Dive Insight:
CHS said its plan to sell Cedar Park Regional Medical Center has been in the works since at least the fourth quarter of 2024. CEO Tim Hingtgen alluded to the deal during the fourth quarter earnings call, saying the provider was in “discussions” that were likely to result in further hospital sales and generate “meaningful proceeds” for the health system.
The buyer, Ascension Seton, operates a network of 13 hospitals and more than 200 care sites, according to Ascension’s press release.
CHS has been chasing hospital sales as the Tennessee-based system looks to deleverage its portfolio.
The provider is one of the largest for-profit operators in the country, with roughly 70 hospitals and more than 1,000 care sites in its 14-state portfolio. However, CHS has recently struggled financially relative to its peers. Last year, the system said it would sell more than $1 billion in facilities to help improve its liquidity.
This year, CHS has sold its Florida-based ShorePoint Health System to AdventHealth in March for $260 million and finalized a deal with Duke Health in April to sell Lake Norman Regional Medical Center for $284 million.
CHS and Ascension unveiled the latest deal as hospital mergers and acquisitions are generally trending down amid market volatility.
In the first quarter, only five deals were announced, compared with last year’s 20, according to a recent report from Kaufman Hall. Most systems looking to do deals amid a market downturn were in financial distress, according to the consultancy.
CHS’ losses grew between 2023 to 2024, rising to a net loss of $516 million, up from a loss of $133 million, on higher medical specialist fees and payer denials.
