New Bucks County nonprofit ended bid to buy Community Health Systems’ last three Pa. hospitals

A new nonprofit company led by Bucks County health-care industry veteran Joshua Nemzoff last week ended its effort to purchase three hospitals in Wilkes-Barre and Scranton after it was unable to raise enough money in the municipal bond market.

Nemzoff’s Woodbridge Healthcare Inc. had agreed in July to pay $120 million for Wilkes-Barre General Hospital in Wilkes-Barre and two Scranton facilities, Regional Hospital of Scranton and Moses Taylor Hospital, from Community Health Systems Inc.

But as a start-up, Woodbridge needed to sell bonds to cover the purchase price and provide money to start running the hospitals. Ziegler, a national investment bank hired to raise the money, was unable to sell enough of the proposed $180 million tax-exempt bond issue to make the deal work, Woodbridge said.

“The entire Woodbridge team is extremely disappointed in this outcome,” Nemzoff said in a statement. “CHS has gone out of its way to help get this deal done including significant concessions on their part. We appreciate all their efforts to do so.”

Woodbridge, which had hoped to complete the purchase by the end of October, projected that the hospitals would be profitable in its first full year of ownership. Last year, the hospitals had a $22 million operating loss on $561 million in revenue, according to the bond offering statement.

Community Health Systems, which is based in Franklin, Tenn., said it will evaluate other options for the three hospitals.

Community Health’s Pennsylvania holdings peaked at 19 hospitals in 2016, according to SEC filings. Among the early sales were five in the Philadelphia area that Tower Health bought for $423 million in 2017. Numerous hospitals that Community Health sold have since closed, including Brandywine and Jennersville Hospitals in Chester County.