SEBRING- After a tumultuous period that has included a federal investigation and a rebellion by a major shareholder, Naples-based hospital chain Health Management Associates, which owns Highlands Regional Medical Center in Sebring, plans to merge with another major hospital company, the firms announced Tuesday.
Tennessee-based Community Health Systems, Inc., will buy HMA in a $7.6 billion deal that will affect at least 25 hospitals in Florida. HMA operates or is a partner in 23 hospitals in the state, while Community Health Systems owns two.
Local hospitals will not be impacted, company officials said.
"The combination of Health Management and CHS is not expected to impact local hospital operations," HMA's Eric Waller of Health Management Associates said in a statement. "Our deep commitment to providing the highest quality patient care will not change."
Nationally, the deal will create an industry giant with 206 hospitals in 29 states, many in smaller and mid-size markets. The purchase, which remains subject to HMA shareholder approval, is expected to close during the first three months of 2014.
"I truly believe we have found the right partner, and this transaction will benefit the great communities we serve,'' HMA Chairman William Schoen said during a conference call Tuesday morning with Wall Street analysts.
Schoen said he and Wayne Smith, chairman and chief executive officer of Community Health Systems, began talking about a possible deal in late 2012. During the conference call, Smith said HMA brings a "very attractive portfolio," and a presentation indicated Florida will be one of the merged company's largest markets.
"HMA's geographical footprint is very complimentary to ours,'' Smith said.
The announcement came after months of questions surrounding HMA. Most recently, major shareholder Glenview Capital Management launched an effort in June to replace the company's board of directors, an effort that HMA has resisted.
Also, HMA President and CEO Gary Newsome announced in May that he would retire to take a position with The Church of Jesus Christ of Latter-Day Saints. HMA announced Tuesday that John M. Starcher, the president of its Eastern Group, will serve as interim company president and CEO.
Meanwhile Tuesday, HMA announced that it had received additional subpoenas in June and July from the U.S. Department of Health and Human Services as part of a long-running investigation into emergency-room issues at company hospitals.
At least in part, that investigation centers on whether HMA pressured physicians to admit emergency-room patients to bring in more revenues. The CBS show "60 Minutes" broadcast a piece on the issue late last year, with HMA arguing that it had not pressured physicians to make admissions decisions.
HMA operates 71 hospitals in 15 states, with its Florida hospitals typically in smaller and mid-size markets such as Bartow, Melbourne, Naples, Brooksville and Milton. But it also finalized a partnership earlier this year to operate Bayfront Medical Center in St. Petersburg.
In addition to the 23 current Florida hospitals, HMA also recently has been chosen to lease Munroe Regional Medical Center in Ocala and Bert Fish Medical Center in New Smyrna Beach, both of which are controlled by public hospital districts. HMA said last month that it could finalize the Munroe partnership by the end of the year and that it was beginning exclusive negotiations with Bert Fish.
Community Health Systems, which is based in Franklin, Tenn., has large concentrations of hospitals in states such as Pennsylvania, Tennessee and Texas. In Florida, its hospitals are Lake Wales Medical Center in Lake Wales and North Okaloosa Medical Center in Crestview.