CHS sells laboratory assets to Labcorp for $194 million

Diving brief:

• Community Health Systems on Tuesday sold some of its outpatient outpatient laboratory services to Labcorp for approximately $194 million in cash before transaction expenses.
• The deal includes assets in 13 states, including patient service centers and in-office phlebotomy sites, according to a CHS news release.
• SCO will continue to operate its inpatient laboratories and emergency departments and provide laboratory services for imaging, preadmission testing and other hospital services.

Dive overview:

The companies say the deal, first announced in July, will benefit patients by giving them broader access to Labcorp’s services, including its menu of specialized tests, data analytics suite and digital tools.

It also allows CHS to refocus on its core offerings, CHS Interim President and CEO Kevin Hammons said in a press release.

“Completing this transaction with Labcorp allows our health systems to focus on core services and improving the overall patient experience, which aligns with our unwavering commitment to providing accessible, high-quality health care to our communities,” Hammons said.

CHS realigned its portfolio to focus on revenue-generating services, including outpatient care. The for-profit operator has divested many acute care hospitals, including facilities in North Carolina and Mississippi. The operator is currently working to close deals to sell three hospitals in Pennsylvania and a facility in Tennessee.

Meanwhile, Labcorp is growing.

Labcorp paid about $839 million last year to acquire clinical and community-based companies, including Baystate Medical Center, Providence Medical Foundation, Westpac Labs, Invitae and BioReference Health. In 2023, the company spent approximately $671.5 million on acquisitions.