Sparks Health System sale to HMA finalized

A definitive agreement to sell Sparks Health System to Naples, Fla.-based Health Management Associates has been signed, according to a Wednesday (Nov. 4) statement by HMA.

After a failed attempt to sell to Alpharetta, Ga.-based Jackson Healthcare, the Sparks Health System board of directors announced Aug. 14 it had signed a tentative agreement to sell the hospital to HMA.

HMA is a publicly held company that reported $104.05 million in net income on total revenue of $3.418 billion for the first nine months of 2009. HMA is no stranger to the area. It operates Summit Medical Center in Van Buren and two Van Buren clinics — Cornerstone Family Clinic and Internal Medicine & Associates.

“We are very pleased to have the opportunity to continue serving the Fort Smith community by broadening our presence with the acquisition of the Sparks Health System,” Gary D. Newsome, HMA’s president and CEO, said in a statement. “Sparks Health System has a 122-year history of serving the Forth Smith community’s health care needs by delivering high quality care, and we are proud to have the opportunity to continue that rich tradition. This potential acquisition offers us additional strategic opportunities to better serve this market and is consistent with our intention to pursue acquisition opportunities that will generate a positive strategic impact that compliments existing operations.”

Following the purchase of the 492-bed Sparks Hospital, HMA will own and operate 55 hospitals, with approximately 8,400 licensed beds, in “non-urban communities” in the U.S. The deal between Sparks and HMA is scheduled to close Nov. 30, according to the HMA statement.

Sparks officials are scheduled to meet with area media Thursday (Nov. 5) morning.

“We are very happy that we’ve been able to reach this agreement with HMA,” Sparks Board Chairperson Judy Boreham said in a separate statement released by Sparks. “This is the culmination of a lot of hard work and focus from a great group of dedicated people. We’ve said all along that our goals for any transaction were clear: providing the highest quality health care to the community, continuing employment for our loyal and dedicated staff, and long-term financial viability to Sparks. We feel confident that HMA is the right partner to accomplish those goals.”

2009 SPARKS CHRONOLOGY
• March 30: Sparks Health System officials announce a tentative agreement to sell the hospital to Alpharetta, Ga.-based Jackson Healthcare. Terms of the deal were not disclosed, and both parties said the deal would close no later than June 30.

• May 15: Sparks issued a statement saying it had extended the date for signing the agreement with Jackson. No reason was given for the extension.

• June 1: Sparks officials withdraw from their decision to sell the hospital to Jackson Healthcare. Sparks CEO Frederick Woodrell noted in a statement: “The execution of this or any other complex financial transaction is unfortunately compromised by the financial environment. We remain in the lowest economic downturn in the country’s recent history. While both sides were committed to a successful outcome, the circumstances just did not allow for an arrangement that the parties could execute on a mutually acceptable time frame. This was simply a business decision based solely on what was the right thing for Sparks and the community.”

• July 2: Sparks CEO Frederick Woodrell tells The City Wire in an interview that the hospital system was in a better financial situation and not being forced to find a financial savior. He said the hospital began seeing positive cash flow in January and that continued through May. It will take “several years” before the hospital is financially strong, but Woodrell said the pressure is off the Sparks Board of Trustees to quickly find a financial relief valve.

• July 7: The City Wire obtained a copy of a June 11 report from Moody’s confirming that finances had improved for Sparks Health System. Moody’s said cash flow was positive for the first 10 months of the hospital’s fiscal year.

• Aug. 14: Sparks officials announce the intent to sell the hospital system to Health Management Associates.