Dive Brief:
Community Health Systems has agreed to sell its Florida-based ShorePoint Health System to Advent Health for $265 million in cash.
The deal, which is expected to close in the first quarter of next year subject to regulatory approval, includes ShorePoint Health Port Charlotte and “certain assets” of ShorePoint Health Punta Gorda, as well as other ancillary businesses, according to a press release.
The Punta Gorda hospital is currently closed after sustaining damage from Hurricanes Helene and Milton earlier this fall. CHS CFO Kevin Hammons said during the company’s third-quarter earnings call last month that the facility will remain closed through the end of the year.
Dive Insight:
The proposed sale continues CHS’ divestiture spree and expands AdventHealth’s footprint across the sunshine state.
CHS has spent 2024 chasing $1 billion in profits from hospital sales — a goal Hammons says the system is on track to meet by year-end or early 2025. The Franklin, Tennessee-based provider has sold about a dozen hospitals this year, according to Hammons, including facilities in Tennessee and North Carolina.
Pressure to sell comes in part from the company’s liquidity concerns. Fitch Ratings downgraded CHS’ credit rating last December, citing lower-than-expected free cash flow and lower-than-expected operating margins.
CHS reported a $391 million net loss in the third quarter, compared with a $91 million loss in the same period last year.
CHS’ Florida portfolio dragged down the operator’s financial performance during the third quarter, executives said. The operator lost approximately $7 million in the third quarter from missed revenue and costs associated with hurricanes, which swept the Southeast during September and October.
ShorePoint Health facilities were among those hit hardest, CEO Tim Hingtgen said during the company’s third- quarter earnings call.
Meanwhile, AdventHealth has flourished in Florida, according to a report from Fitch Ratings.
The provider, which operates over 50 hospitals across nine states, is heavily concentrated in the state. Its Florida hospitals generated nearly 80% of the provider’s revenue last year and AdventHealth held approximately 43% of the Central Florida market as of May, according to Fitch.
