Community Health Evaluates North Carolina Hospital Operations Amid Novant Deal Termination

(RTTNews) - Community Health Systems Inc. (CYH), in an update on the planned divestiture of two North Carolina hospitals, said that it is in the process of evaluating the current operations at Lake Norman Regional Medical Center and Davis Regional Psychiatric Hospital in light of termination of the Novant transaction.

In the interim, there will be no disruption to patient care or any other immediate changes to the healthcare services offered by these hospitals.

On June 18, 2024, Novant Health informed Community Health Systems that Novant has decided not to move forward with the acquisition of two North Carolina hospitals. The transactions were contemplated by an Asset Purchase Agreement dated February 28, 2023, by and among Novant and certain subsidiaries of the Company or the "CHS Selling Entities".

Novant had agreed to acquire substantially all of the assets of, and assume certain liabilities from, the CHS Selling Entities related to Lake Norman Regional Medical Center, a 123-bed hospital in Lake Norman, North Carolina; Davis Regional Psychiatric Hospital, a 144-bed behavioral health facility in Mooresville, North Carolina; and certain related businesses.

But on Tuesday, Novant has informed Community Health Systems it intends to exercise its right to formally terminate the Purchase Agreement soon. Novant's decision follows a ruling by the Fourth Circuit Court of Appeals earlier this week.

On June 18, 2024, the Court issued a temporary injunction blocking the sale to Novant Health, pending final resolution of an appeal by the Federal Trade Commission. The injunction prevented completion of the transaction until the Court of Appeals decides whether to uphold or overturn a previous District Court decision that allowed the sale to proceed.