In a significant healthcare transaction, Woodbridge Healthcare, a non-profit organization, has entered into an agreement to purchase Commonwealth Health, a network of three hospitals in northeastern Pennsylvania, from Community Health Systems (CHS). The deal, valued at approximately $120 million, is expected to close by the end of the year, subject to regulatory approval.
The acquisition includes Wilkes-Barre General Hospital, Regional Hospital of Scranton, and Moses Taylor Hospital. This move marks a strategic shift for CHS, which has been actively divesting assets to optimize its portfolio and reduce debt. The company aims to generate $1 billion through multiple transactions, according to its chief financial officer, Kevin Hammons.
However, CHS has encountered challenges in executing its divestiture strategy. A proposed $320 million deal with Novant Health was thwarted by the Federal Trade Commission. Despite this setback, Hammons expressed confidence in completing other pending deals, attributing the company’s focus on exploring opportunities outside its traditional markets to this experience.
That is encouraging providers to look to outside markets when thinking about deals, Hammons said.
“So we really don’t see any headwinds on being able to complete the other deals that we’re currently working on,” he said.
Woodbridge, on the other hand, is expanding its footprint through this acquisition. The nonprofit healthcare provider aims to preserve access to care for the communities served by these hospitals while implementing its patient-centric care model.
The sale of these Pennsylvania hospitals represents a strategic move for both CHS and Woodbridge. As the healthcare industry continues to evolve, consolidation and divestitures are becoming increasingly common as providers adapt to changing market dynamics and regulatory pressures.
