An affiliate of CHRISTUS Health of Irving, Texas, on Tuesday announced an agreement to buy Wadley Regional Medical Center in Texarkana, Texas, from Steward Health of Dallas as part of the for-profit hospital operator’s bankruptcy reorganization.
The nonprofit CHRISTUS Health Ark-La-Tex would pay $4.5 million for the 370-bed hospital, according to filings in U.S. Bankruptcy Court for the Southern District of Texas. The stalking horse bid will be subject to higher or better-qualified bids due to be received by Monday. After that, an auction may be held in accordance with bankruptcy-court approved procedures.
The transaction is still subject to customary closing conditions, including bankruptcy court and regulatory approval. It’s expected to close in the coming months, should CHRISTUS Health Ark-La-Tex emerge as the winning buyer at the auction.
A successful bid would expand CHRISTUS’ presence in Texarkana. An affiliate of the hospital system already operates CHRISTUS St. Michael Hospital on the Texas side of the city.
“CHRISTUS Health has a long, proud history of providing exceptional and compassionate care to the Texarkana community for over 100 years,” Ernie Sadau, CHRISTUS president and CEO, said in a news release. “We want to ensure that legacy of service continues into the next century and are best positioned to do that by bringing Wadley Regional Medical Center into the CHRISTUS family.”
CHRISTUS operates more than 60 hospitals in Texas, Louisiana, New Mexico, Chile, Colombia and Mexico.
Steward acquired the Texarkana hospital in 2017 with the purchase of IASIS Healthcare Corp. of Franklin, Tennessee, a deal that made Steward the largest hospital operator in the U.S.
Steward filed for Chapter 11 bankruptcy in May and announced plans to sell all of its 31 hospitals, including the Wadley Regional Medical Center in Texarkana and the Wadley Regional Medical Center in Hope. The company received approval for a $225 million loan to keep its hospitals open while it moves through the bankruptcy process.
The company halted construction on a new $227 million hospital in Texarkana a few months earlier. The project had been slated for completion in the summer of 2025.
Steward in July accepted a $200,000 cash bid for the Hope hospital. The buyer is Pafford Health Systems Inc., a local ambulance and health services provider. There were no other bidders for the 79-bed hospital, which employs about 80 people.
If the bankruptcy judge approves the sale, Wadley Regional would be operated by the newly created Southwest Arkansas Healthcare Authority, and the hospital would be renamed Southwest Arkansas Regional Medical Center.
Steward Health CEO Dr. Ralph de la Torre has blamed rising costs and insufficient reimbursement by government payers for the hospital system’s financial woes. But some U.S. lawmakers aren’t buying his explanation. Members of the U.S. Senate Health Committee have accused company executives of lining their own pockets at the hospital system’s expense.
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