Sharon Regional Health System exited the nonprofit world Tuesday when its assets were formally bought in a deal valued at $145 million.
Along with a $70 million sales price, Franklin, Tenn.-based Community Health System Inc. has committed to $75 million in improvements at Sharon Regional over the next five years.
The deal with the for-profit company, which was announced late last year, also includes Sharon Regional’s Physician Services, a unit that employs 150 doctors and support staff.
Sharon Regional board members and executives previously said the sale was needed to ensure the institution’s survival and ability to grow.
All Sharon Regional employees in “good standing’’ were retained with “similar’’ compensation and benefit levels.
John R. “Jack’’ Janoso Jr., Sharon Regional chief executive officer, will hold onto his post.
“Obviously, we’re excited about this transaction,” Janoso said. “We finally achieved what we’ve set out to do. The staff is excited to have a long-term solution to their employment.’’
He acknowledged there is still a lot to learn about Community Health. “But everything we’ve learned is positive. It’s a great day for the organization.”
The new owner had previously said it will grow Sharon Regional’s essential services, including medical/surgical, critical care, open heart and vascular surgery, emergency services and obstetrics.
Now a for-profit business, Sharon Regional officials said that doesn’t mean the end of its helping those in need. The 251-bed hospital will continue charity care policies to help serve indigent patients and participate in Medicare and Medicaid. Further, Sharon Regional said it will play an active role in the community through volunteerism, community outreach, and charitable contributions.
“With the resources now available, we look forward to building on the quality of care we deliver,” Dr. John Gallagher, president of the Sharon Regional medical staff, said in a news release. “We will be a stronger health care system with sufficient access to capital to improve our infrastructure and invest in technology.
A local board of trustees will be appointed, composed of community leaders and members of the hospital medical staff.
One change afoot for Sharon Regional is that its properties can now be placed on the tax rolls. As a nonprofit, the institution didn’t have to pay real estate taxes.
Proceeds from the sale of the assets will go to the nonprofit institution that had operated as Sharon Regional and will have a new name. That institution will use the funds to pay off debts, such as pensions, workers compensation cases and any outstanding legal bills.
Paying off the debts will likely take years. Any remaining funds will be used for the overall health needs of the community, such as offering classes and giving access to health care services.
While it wasn’t known how much money will be left after debts are paid, the best guess by board members is it will be at least $10 million.
With more than 1,750 employees, Sharon Regional is Mercer County’s largest employer.
Sharon Regional will continue to use its existing name but will operate as an affiliate of Community Health System.
One sign that Sharon Regional has entered the for-profit world is that the announcement of the sale was made after the stock market closed. Community Health System is a publicly held company with shares traded on the New York Stock Exchange under the symbol: CYH. Its stock price closed Tuesday at $39.08, down 9 cents, or 0.23 percent from Monday.
The company has been publicly traded since June 9, 2000. Its total revenues in 2013 were $12.997 billion on earnings of $141 million.
Community Health System touts itself as the largest publicly traded hospital company in the nation.