Hospital M&A Revs Up in February

Two days into February 2016 and we’ve recorded four hospital transactions. Considering there were only two in all of January, this action is impressive. One was a straight real estate deal from Carter Validus Mission Critical REIT II, Inc., which paid $33.9 million for Sherman, Texas-based Heritage Park Surgical Hospital and Visionary Medical Imaging. Both facilities were built in 2005. The hospital has 57,576 square feet, and was renovated in 2010 to become a full-service surgical hospital. VMI is an 8,055 square foot facility. The deal actually closed in November 2015, but wasn’t announced until now.

Larkin Community Hospital, a for-profit, 146-bed hospital in South Miami, Florida, picked up Palm Springs General Hospital for $40 million. The family of the late Campbell A. Smith sold the 247-bed facility, including an adjoining medical office building, on the 15-acre campus. This sale is not without a lawsuit, as IHS Hialeah had an earlier agreement to acquire the hospital for $63 million, and ran the hospital for four months before the owners terminated the contract in November 2015.

LifePoint Health (NASDAQ: LPNT) finalized its acquisition of the two Sisters of Charity Providence Hospitals in Columbia, South Carolina, as well as its 13 physician practices, a network of rehabilitation centers, two sleep centers and a school of cardiac diagnostics. A letter of intent was signed last summer, and LifePoint took over on February 1. Finanical terms were not disclosed.

Finally, St. Elizabeth Healthcare, a six-hospital operation based in Edgewood, Kentucky, took control of New Horizons Medical Center, a 25-bed hospital that is the former Owen County Memorial Hospital. Its owners filed for Chapter 11 bankruptcy protection in May 2015. In December 2014, it posted operating revenue of $8.7 million, but only $25,254 in EBITDA for the year.



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