Community Health Systems (NYSE:CYH) Finalizes Its Sale Of Clarksdale, Mississippi Hospital


Community Health Systems (NYSE:CYH) has announced that it has concluded its sale of the Merit Health Hospital located In Clarksdale, Northwest of Mississippi.

The health company made the announcement on November 1, revealing that it has concluded the sale of the 181-bed hospital through its subsidiaries. The Clarksdale Hospital was acquired by the subsidiaries of Curae Health, Inc. and the recently completed deal is expected to facilitate the transfer of the associated assets to the involved subsidiaries of Curae Health. Affiliates of Community Health Systems are expected to continue running the operations of nine other hospitals in Mississippi.

The sale of the Merit Health Hospital in Mississippi is part of the company’s planned divestitures which are aimed at streamlining its business. A few months ago, the company signed a definitive agreement for the sale of five hospitals and their associated assets in Pennsylvania. The deal was for the sale of the hospitals to the subsidiaries of Reading Health System.

“The company is burdened with long-term debt and has therefore implemented portfolio rationalization and a deleveraging strategy by divesting hospitals and non-hospital businesses,” pointed out a NASDAQ report.

The sale of the Clarksdale hospital also highlights Community Health’s growing relationship with Curae Health. In 2016, CHS announced that it struck a deal to sell four of its hospitals located in rural areas. The hospitals that the company has been selling are mostly those that have less operating margins. CHS is thus divesting these hospitals not only to help alleviate debt but also so that it will be able to focus on the businesses that have been offering strong business returns.

The divestments have also been pivotal towards restoring investor confidence especially due to the significantly decreased debt burden. This has been evident due to the bullish performance of the company’s stock. The divestments have been so effective that Community Health Systems’ stock performance has been better than that of competitors such as Universal Health Services, Inc. (NYSE:UHS) and LifePoint Health Inc (NASDAQ:LPNT).

Community Health Systems stock closed the latest trading session on Wednesday at $5.44 after tanking by 7.80 percent compared to the value of the stock during the previous close.


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