April 1, 2016
Nashville Business Journal
by Eleanor Kennedy
Nashville’s newest publicly traded hospital company, Quorum Health Corp., will officially launch at the end of this month.
Community Health Systems’s planned spinout of 38 hospitals and Quorum Health Resources, its advisory and consulting subsidiary, will become effective April 29, the company announced late Friday. Quorum, to be traded under the symbol QHC, had been slated to launch during the first quarter of the year, but CHS delayed the spinout because of “market conditions,” among other unspecified reasons.
The spinout is a big shakeup for Franklin-based CHS (NYSE: CYH), which just two years ago completed a blockbuster deal to establish itself as the country’s largest for-profit hospital company by number of hospitals. Once the spinout is complete, Nashville-based HCA Holdings Inc., still the leader in revenue, will reclaim that title.
It also comes at a time when the industry is, for the most part, consolidating, rather than breaking apart. But company leaders have said the spinout will create two companies with more streamlined market types, allowing for more efficient management. (The Quorum hospitals are primarily located in cities and counties with populations of 50,000 or less, according to a news release.)
The board of directors has approved the terms of the spinout, in which CHS shareholders (as of April 22) will receive one share of QHC stock for every four shares of CHS, the release says. Regular trading of the stock will begin May 2.
CHS struggled at the end of 2015, closing out the year with a loss in the fourth quarter. In addition to establishing QHC, which will be headquartered in Williamson County, the company also has plans for a $66 million expansion in Antioch for support offices.