Falcon Investors, LLC Enters Into Purchase Agreement With a Subsidiary of Community Health Systems, Inc. for the Sale of MetroSouth Medical Center
BLUE ISLAND, Ill., Dec. 12, 2011 /PRNewswire/ — Falcon Investors, LLC and Transition Healthcare Company, through their affiliate MSMC Investors, LLC, have entered into a definitive agreement for the sale of MetroSouth Medical Center to a subsidiary of Community Health Systems, Inc.
Falcon Investors and its management partner, Transition Healthcare Company acquired MetroSouth Medical Center in 2008 to save the hospital from financial ruin and imminent closure, preserving quality hospital services for the residents of Blue Island and surrounding communities and saving the jobs of 1,200 employees. With a swift infusion of capital, restructuring expertise and top hospital management, Falcon and Transition achieved an impressive turnaround of hospital operations, restoring financial stability, successfully recruiting physicians, and increasing the quality of care available for patients. During this period, the hospital converted to all private rooms, implemented a hospital-wide electronic medical record to further enhance patient care, and broadened its outreach through health clinics in eight surrounding communities.
At the same time that these advancements were occurring, shifts in the U.S. economy and healthcare environment changed the long-term outlook for what could be accomplished under the current private ownership model, prompting MSMC Investors to consider a sale of the hospital to a larger healthcare operator with the scale and resources required to continue moving the hospital forward.
“The leadership of MSMC engaged in a thoughtful process to ensure the best possible future for our hospital and determined that affiliating with a larger organization offered our greatest opportunity for long-term success and growth,” said Falcon Investors chief executive officer David Reis.
“In Community Health Systems, we found an exceptionally managed, highly-regarded national organization with vast resources to support the next steps in the hospital’s progression,” added Lawrence Krule, Falcon Investors executive vice president and chief restructuring officer of MetroSouth Medical Center.
Benefits of the transaction for MetroSouth Medical Center include:
- The continuation of all essential services at the hospital, including an open and accessible emergency department;
- The infusion of at least $20 million in equipment upgrades, information systems, infrastructure improvements and working capital at MSMC in the first five years after the transaction;
- The hiring of substantially all active employees in good standing at the time the transaction is complete, offering employees the same position and rate of pay, and recognizing years of service;
- The continuation of relationships with medical staff physicians;
- The continuation of charity care policies consistent with those currently in place;
- Guidance by a local board of trustees comprised of members of the medical staff and community leaders.
Enrique Beckmann, M.D., Ph.D. will continue as chief executive officer of the hospital, helping to ensure management continuity through the ownership transition and to continuing his leadership of the hospital’s strategic growth initiatives.
“Partnership with a hospital system the size and caliber of CHS is an exciting development that brings unparalleled advantage to our hospital, medical staff, employees and community,” said Dr. Beckmann, chief executive officer and chief medical officer of MetroSouth Medical Center. “In addition to its financial strength, CHS is highly regarded for its physician recruitment successes, strong clinical quality and customer service initiatives, group purchasing power, and the best practices it has developed in operating hospitals across the country.”
Transition Managing Member, Thomas Reardon said, “This transaction is in the best interest of everyone involved and will allow the quality operations of MetroSouth to continue in the hands of an experienced, committed hospital company.”
Through its affiliates, Community Health Systems currently operates over 130 hospitals, including seven in the state of Illinois.
The transaction is subject to certain closing requirements, including a Certificate of Need (CON) from the Illinois Health Facilities and Services Review Board. The CON hearing is expected to take place in late February 2012, with the transaction closing shortly after the CON is approved.
About MetroSouth Medical Center
MetroSouth Medical Center, formerly known as St. Francis Hospital, a Joint Commission certified hospital is known for exceptional patient care, most especially for its cardiac and OB/GYN services. The full-service hospital has recently opened 10 community health centers, a Heartburn Clinic, an Adult & Senior Outpatient Health Center and formed a partnership with WorkRight for occupational health. In addition, the hospital features 100% private rooms, now uses electronic medical records and continues to lead with new technology, including a stroke robot/telemedicine partnership with Rush University Medical Center, IntsyMeds prescription vending machine in the emergency department and an MRI-compatible pacemaker. The hospital delivers more than 1,600 babies each year and provides patients a Level 2+ birthing center, 24/7 obstetrical coverage, high-risk maternal-fetal specialists and certified nurse midwives. MetroSouth was recently named to the U.S. News & World Report list of “Best Hospitals in Chicago” for 2011-2012 and rated by CareChex as one of the “Top 100 Hospitals in the Nation for Medical Excellence” for 2012.
About Falcon Investors, LLC
Located in Harrison, NY, Falcon Investors is devoted to investing capital and professional expertise in healthcare related opportunities, including hospitals and nursing homes. Falcon Investors is owned by entities controlled by David Reis, who is a nationally known developer-owner of senior care living facilities. Mr. Reis has developed or bought for his own portfolio retirement oriented properties spanning the continuum of care from nursing home and assisted living facilities to full service continuing care retirement communities. www.FalconInvestors.com
About Transition Healthcare Company
Transition Healthcare Company, LLC (“THC”) is a hospital management company with offices in Franklin, TN. The management team at THC provides a unique blend of experienced hospital turnaround and management expertise, access to financial resources, as well as the ability to act quickly and discreetly. In addition to the Members of THC, the company has a deep bench of healthcare executives and clinicians experienced in hospital turnaround and interim management.
About Community Health Systems, Inc.
Located in the Nashville, Tenn., suburb of Franklin, Community Health Systems, Inc. is one of the largest publicly-traded hospital companies in the United States and a leading operator of general acute care hospitals in non-urban and mid-size markets throughout the country. The organization’s affiliates own, operate or lease more than 130 hospitals in 29 states. Its hospitals offer a broad range of inpatient and surgical services, outpatient treatment and skilled nursing care. Shares in Community Health Systems, Inc. are traded on the New York Stock Exchange under the symbol “CYH.”
SOURCE Falcon Investors, LLC