Sparks Health System to be sold to Georgia company
by March 30, 2009 3:07 pm 158 views
The Sparks Health System Board of Directors announced today (Mar. 30) that the hospital system is being purchased by Alpharetta, Ga.-based Jackson Healthcare.
Terms of the deal were not disclosed. Both parties are aiming to close the deal no later than June 30, 2009.
Board Chairman Judy Boreham said the transaction provides a welcome opportunity for growth and is the result of a careful, months-long search for the right partner.
“We were very selective in seeking a capital partner,” Boreham noted in a statement. “We were never interested in just selling Sparks. Given our 122-year history of service to the community, we wanted to find someone to partner with us, to come alongside and join us in furthering our mission. That’s exactly the relationship Jackson proposed, and we are very happy that this arrangement will allow us to make advances in the development of our health system.”
Sparks, founded in 1887, directly and indirectly employs more than 2,000 in the area and reported 2008 admissions of almost 13,000 patients.
Jackson Hospital Affiliates President Gary Bell said Sparks would become the company’s “flagship facility.”
“JHA intends to combine our managerial, healthcare and technology expertise with Sparks’ dedicated healthcare professionals to serve as a model for healthcare delivery in the United States,” Bell noted in the statement.
However, JHA is acquiring a financially troubled hospital. In early February, Moody’s Investors Service indicated the hospital had about 11 days of cash on hand as of Dec. 31. The hospital had 78 days of cash on hand as of June 30, 2007. Moody’s painted bankruptcy as a likelihood for a hospital with about $53.1 million in bonded indebtedness rated by Moody’s as “extremely poor credit quality.”
“It is no secret that Sparks, along with the rest of the healthcare industry, has been faced with significant challenges in recent months,” said Sparks Health System President Frederick Woodrell in the statement. “Our board wisely sought out a capital partner – a relationship that allows us to focus on delivering the best possible care for our patients and the community and positioning us to have the capital we need to continue our growth.”
Charles Jennings, an internal medicine physician and Sparks’ chief of staff, said the move will improve the hospital’s ability to recruit doctors and improve the hospital’s ability to keep pace with technological changes. Jennings also serves on the Sparks board of directors.
Cole Goodman, a Fort Smith city director and a plastic and reconstructive surgeon not affiliated with Sparks, said he hopes the deal is a positive. Goodman’s father, Dr. R.C. Goodman, was one of the first anesthesiologists at Sparks and the founder of the hospital’s chronic treatment center.
“My view of this is what ever is best for the survival of Sparks Hospital is best for the people of this area. This community needs both hospitals,” Goodman said.
Jackson Healthcare is the second serious Sparks suitor in this decade. In 2003, Plano, Texas-based Triad Hospitals and Sparks announced the intent to pursue a joint venture that would include the construction of a new hospital. The merger never materialized, but Quorum Health Resources, then a subsidiary of Triad, was signed to manage Sparks. That management agreement continues today.
Jackson Healthcare, founded in 2000, is in the business of helping hospitals find qualified staff, hospital management, and health information technology systems and equipment. The company employs 400 at its Alpharetta, Ga., corporate headquarters and more than 600 nationally.
The company works with about 1,000 hospitals each year.