Franklin-based Community had entered the fray before Tuesday's deadline for rival bids, joining Nashville-based Ardent Health Services, which two months ago had signed an agreement to buy assets of Forum Health.
The latest deal comes amid a flurry of U.S. sales activity in which for-profit chains like Community have bought nonprofits. Analysts say federal health-care reform's promise of extending insurance to 32 million uninsured Americans, improved credit markets and a greater willingness by nonprofits to consider partnerships or outright sales have sparked a perfect storm for more acquisitions.
The Community purchase announced Thursday still requires a review by Ohio's attorney general to protect community benefits and ensure that for-profit Community's purchase is in the public's best interest. The proposed sale also is subject to final approval of a bankruptcy judge in a hearing set for early next week.
Community's last-minute bid for Forum shows a level of increased competition among for-profit hospital chains for other medical operations viewed as highly valued, analysts said.
"What it says is that when Community sees a property they want, they're not afraid to spend to get it," said Sheryl Skolnick, an analyst with CRT Capital in Stamford, Conn.
On Tuesday, Community had offered $100 million for Forum's assets, $30 million more than Ardent's initial offer. At Thursday's auction, the two companies went back and forth above the $100 million level before Community finally won by offering its
$120 million bid.
"We always knew that CHS would be back and knew that it would be competitive," said Kevin Gwin, a spokesman for Ardent. "We're disappointed, but we leave feeling good about our approach, our vision and what we did in northeast Ohio."(2 of 2)
Real Estate Outlook: After the CreditsArdent agrees to buy Ohio hospitals