March 19, 2007
In a deal which should create the nation's largest publicly-traded hospital operator, Community Health Systems has agreed to buy Triad Hospitals for about $6.8 billion, including $5.1 billion upfront and the assumption of $1.7 billion in debt. HCA used to be the nation's top publicly-held hospital firm, but it was taken private in a $33 billion leveraged buyout last year. In agreeing to the Community Health acquisition, Triad paid out a $20 million termination fee to CCMP Capital and GS Capital, since the agreement canceled an existing buyout deal.
When finalized, the acquisition will create a $9.9 billion company with 130 hospitals in 28 states, including Community Health's 77 existing hospitals. Community Health is financing the buyout with $10.3 billion in debt financing. Once they begin working together, the companies expect to achieve operating efficiencies of $40 million to $50 million, according to Community Health CFO Larry Cash.