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HCA Healthcare to Buy Mission Health for Portfolio Boost

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HCA Healthcare, Inc (HCA - Free Report) has agreed to acquire Mission Health system, the state’s sixth largest health system, for $1.5 billion. Per the terms of the acquisition, most facilities and clinics of Mission Health will be operating under the Mission brand while being integral to HCA Healthcare. The transaction is subject to certain closing conditions such as completion of the Asset Purchase Agreement between the concerned parties and a review by the North Carolina Attorney General’s Office.

Per the deal, HCA Healthcare will buy a number of healthcare hubs ranging from the 763-bed Mission Hospital in Asheville, 49-bed Mission Hospital McDowell in Marion, 80-bed CarePartners Rehabilitation Hospital in Asheville, Angel Medical Center in Franklin comprising 25-beds, Transylvania Regional Hospital in Brevard consisting of 25-beds, Blue Ridge Regional Hospital in Spruce Pine constituting 25 beds and the 24-bed Highlands-Cashiers Hospital in Highlands. The acquirer will maintain key clinical services for a minimum of five years and all rehabilitation as well as acute-care hospitals for at least 10 years excluding St. Joseph's Hospital, which is already planned for transition.
The proceeds from this transaction will be transferred to the nonprofit Dogwood Health Trust so that the institution can use the same to serve people and communities of western North Carolina in a better way.

HCA Healthcare will also incur $430 million over a span of five years that includes the completion of Mission Hospital for Advanced Medicine, building a replacement hospital for Angel Medical Center and a new Behavioral Health hospital’s construction as well. Also, HCA Healthcare and Mission Health will contribute $25 million each for an accumulated fund of $50 million to support businesses on health care innovations to better serve people in the western zone of North Carolina.

HCA Healthcare expects to provide a package of enriched services to its members leveraging Mission Health’s more than 130 years’ experience of service to patients across western North Carolina. The company has been focusing on expansion through consolidations for quite some time now. Its solid inorganic growth strategies have led to increased patient volumes enabled network growth across various markets.

Merger and acquisition activity is still on a high for hospitals and health systems to enhance portfolios and provide better healthcare services to communities. Recently, one of its peers, Universal Health Services, Inc. (UHS - Free Report) , acquired The Danshell Group, which owns and operates 25 facilities with 288 beds in the United Kingdom.

Shares of HCA Healthcare have soared 70.5% in a year’s time, outperforming its industry’s growth of 42.5%. The stocks carry a Zacks Rank #2 (Buy).


Other Key Picks

Investors looking for a couple of other top-ranked stocks in the same industry can also consider WellCare Health Plans, Inc. (WCG - Free Report) and Anthem, Inc (ANTM - Free Report) .

WellCare Health offers managed care services for government-sponsored health care programs. The company came up with an average four-quarter positive surprise of 53.89%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Anthem and its subsidiaries offer network-based managed care health benefit plans to individuals, small as well as large groups, plus Medicaid and Medicare markets. The company delivered an average four-quarter beat of 6.65% and carries a Zacks Rank of 2.

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