Friday, June 11, 2010

Ardent agrees to buy Ohio hospitals

Ardent Health Services has an agreement to buy assets of an Ohio-based hospital system out of bankruptcy for $69.8 million. Under the asset purchase deal, Nashville-based Ardent will buy three hospitals and largely all of the operating assets of Forum Health.
It's the latest in a run of deals struck by well-capitalized hospital chains based out of the Nashville area to scoop up not-for-profit systems that overall face challenges accessing capital and lingering uncertainty over health-care reform.

"Well-capitalized for-profit operators have the ability to buy these struggling assets at attractive valuations, invest capital into those facilities to make them competitive and hopefully drive margin growth and profitability," said Frank Morgan, an analyst with RBC Capital Markets Inc. in Brentwood.

Among pending deals, LifePoint Hospitals of Brentwood agreed to pay $154 million in cash under an asset purchase agreement to buy Gallatin-based Sumner Regional Health Systems. Also, Nashville-based Vanguard Health Systems has a letter of intent and is working toward a definitive agreement to buy Detroit Medical Center in a deal valued at about $417 million.

As part of the Ardent deal, the health services company pledged to keep all of Youngstown, Ohio-based Forum's hospitals open and invest up to $70 million over five years into renovations, new equipment and other upgrades.

Just over a year ago, Forum Health and related entities filed for reorganization under Chapter 11 of the nation's bankruptcy code. A bankruptcy judge will review the agreement between Ardent and Forum and hear any other competing bids or objections.

In addition to the hospitals, Ardent said it would buy Forum's physician group, its two diagnostic and imaging centers and five laboratory sites. All three unions that represent Forum's employees and the Ohio Nurses Association support Ardent's deal, according to the company.

Getahn Ward covers the business of health care. He can be reached at 615-726-5968 or at

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