JAMESTOWN — Rennova Health Inc. announced Friday that it has completed its purchase of Jamestown Medical Center.
Rennova, the parent company of Big South Fork Medical Center in Oneida, purchased the Jamestown facility from Community Health Systems Inc. at a total cost of about $1.1 million.
The 85-bed acute care hospital becomes the second rural hospital under Rennova’s umbrella, following the Scott County hospital, which reopened under Rennova’s ownership last year.
Rennova is a medical diagnostics company that is following similar firms in making moves into the arena of rural hospital ownership. It purchased the former Pioneer Community Hospital of Scott from Mississippi-based Pioneer Health Services for about $1 million, including $500,000 in back-taxes owed by PHS, which filed for Chapter 11 bankruptcy protection and closed the Oneida facility in June 2016.
The move to purchase the Jamestown hospital came as CHS — the parent company of Tennova — undertakes a massive selloff of its assets to pay down more than $14 billion in debt.
Rennova, which is based in West Palm Beach, Fla., has said that the Jamestown hospital complements the Oneida hospital.
“We believe this acquisition complements our previously purchased hospital in Oneida, and the two hospitals located within one hour drive from each other create a number of synergies and efficiencies for service and management,” said Seamus Lagan, Rennova’s CEO. “We look forward to expanding the needed services we offer these local communities and believe this acquisition increases the opportunity and value for our shareholders.”
With the new acquisition complete, it’s likely that Big South Fork Medical Center will recommend its patients to the Jamestown hospital for services that cannot be performed at the Oneida facility. Since Jamestown Medical Center is also an established hospital, with about $15 million in annual revenues, it’s also likely that Rennova — which is strapped for cash and was delisted by the NASDAQ earlier this year for excessive stock splitting — will hope to bolster its bottom line and its cash flow with the purchase.
Like the Oneida hospital, the Jamestown facility provides services for mostly Medicare and Medicaid patients. Rennova said in a statement Friday that those patients make up in excess of 60 percent of the payor mix at the Jamestown hospital, and that it does not expect that to change significantly.
The Jamestown hospital operates in a 90,000-square-feet facility on eight acres of land.