Tower Health paid $418M for 5 area hos­pi­tals

The Community Connection - - LOCAL NEWS - By Donna Rovins drovins@21st-cen­tu­ry­media.com @Mer­cBiz on Twit­ter Email busi­ness story ideas to busi­ness writer drovins@21stcen­tu­ry­media.com

FRANKLIN, TENN. » Tower Health’s pur­chase of five area hos­pi­tals cost the Berks County-based health sys­tem ap­prox­i­mately $418 mil­lion.

Ac­cord­ing to in­for­ma­tion filed Nov. 2 with the Se­cu­ri­ties and Ex­change Com­mis­sion by Com­mu­nity Health Sys­tems Inc., the for­mer owner of the hos­pi­tals, the pur­chase price was paid in cash at the deal’s clos­ing on Sept. 29.

The ac­qui­si­tion, an­nounced in May, be­came of­fi­cial on Oct. 1. Hos­pi­tals in­cluded in the trans­ac­tion were Brandy­wine Hos­pi­tal in Caln Town­ship (169 li­censed beds), Ch­est­nut Hill Hos­pi­tal in Philadel­phia (148 li­censed beds), Jen­nersville Hos­pi­tal in Penn Town­ship in south­ern Ch­ester County (63 li­censed beds), Phoenixville Hos­pi­tal in Phoenixville (151 li­censed beds) and Pottstown Me­mo­rial Med­i­cal Cen­ter in Pottstown (232 li­censed beds).

Terms of the sale were not pre­vi­ously an­nounced pub­licly. In­di­vid­ual sales prices for each hos­pi­tal were not listed in the SEC doc­u­ments. In a state­ment Nov. 3, Tower Health said, “the terms of the agree­ment are con­fi­den­tial and Tower Health is not able to dis­close the pur­chase price.”

The ma­jor ex­pan­sion for Tower Health takes it beyond the bor­ders of Berks County into south­east­ern Penn­syl­va­nia. Tower Health, which had been Read­ing Health Sys­tem and op­er­ated Read­ing Hos­pi­tal in West Read­ing, im­ple­mented the new name upon com­ple­tion of the ac­qui­si­tion. All of the hos­pi­tals are now part of Tower Health and two had name changes. Pottstown Me­mo­rial Med­i­cal Cen­ter is now known as Pottstown Hos­pi­tal and Jen­nersville Re­gional Hos­pi­tal is now known as Jen­nersville Hos­pi­tal.

Tower Health has 11,000 em­ploy­ees, of­fer­ing health­care to an es­ti­mated 2.5 mil­lion peo­ple.

In Au­gust, the Berks County In­dus­trial De­vel­op­ment Au­thor­ity ap­proved the health sys­tem’s ap­pli­ca­tion for a tax-ex­empt rev­enue bond is­sue — not to ex­ceed $650 mil­lion.

Ap­proval was granted fol­low­ing a pub­lic hear­ing, and ac­cord­ing to Thomas C. McKeon, ex­ec­u­tive di­rec­tor of the Berks County In­dus­trial De­vel­op­ment Au­thor­ity, the bond is­sue was a record amount for the agency.

In ad­di­tion to the ac­qui­si­tion of the five hos­pi­tals, the bond was also ex­pected to be used to pay for the de­sign, con­struc­tion, in­stal­la­tion and fur­nish­ing of the Read­ing HealthPlex for Ad­vanced Sur­gi­cal and Pa­tient Care, a sur­gi­cal and in­pa­tient tower in West Read­ing.

DIG­I­TAL FIRST ME­DIA FILE PHOTO

Tower Health pur­chased five area hos­pi­tals for an es­ti­mated $418 mil­lion in cash, ac­cord­ing to an SEC fil­ing by for­mer owner Com­mu­nity Health sys­tems Inc. Pottstown Hos­pi­tal is among the group of hos­pi­tals pur­chased. Oth­ers in­clude Brandy­wine Hos­pi­tal, Ch­est­nut Hill Hos­pi­tal, Jen­nersville Hos­pi­tal and Phoenixville Hos­pi­tal.

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