Capella Health

Capella Healthcare has emerged as a national leader in the development and operation of healthcare facilities in non-urban markets. The Company was founded in April of 2005⁽¹⁾ by seasoned healthcare professionals with a vision to provide clinical, operational and financial expertise to community hospitals in order to make a positive difference in the local healthcare environment.

Capella is a privately-held company with significant financial resources. Based on the experience and vision of its founders in 2005, Capella partnered with GTCR Golder Rauner, a successful investment firm, which made a remarkable $200 million equity commitment to Capella – a commitment that has allowed the company to grow steadily. GTCR Golder Rauner has since committed an additional $200 million to Capella for new growth opportunities. Capella reinvests 100% of net cash flow back into its family of hospitals to strengthen and expand services and facilities.

In November of 2005, Capella Healthcare acquired its first four hospitals from HCA, including:

• Capital Medical Center (Olympia, WA)
• Grandview Medical Center (Jasper, TN) ⁽²⁾
• River Park Hospital (McMinnville, TN)
• Southwestern Medical Center (Lawton, OK)

In April 2007, Capella entered into a lease arrangement with the Muskogee Regional Health Center Trust Authority, a public trust, to lease Muskogee Regional Medical Center (Muskogee, OK) for $120 million for a term of 40 years. City officials created the City of Muskogee Foundation as a nonprofit corporation from the net proceeds of this sale. With a mission to make a real difference, the Foundation was established for the purpose of effectively developing, supporting, promoting, and improving programs and facilities relating to education, arts, culture, community revitalization and beautification, social services, health care, economic development, infrastructure, housing, and recreation for Muskogee and surrounding areas and to improve the quality of life of residents of Muskogee.

In February of 2008, Capella acquired nine hospitals from Community Health Systems, adding communities in four more states to the existing three, including:

• Hartselle Medical Center (Hartselle, AL) ⁽²⁾
• Highlands Medical Center, formerly White County Community Hospital (Sparta, TN)
• Jacksonville Medical Center (Jacksonville, AL) ⁽²⁾
• Mineral Area Regional Medical Center (Farmington, MO)
• National Park Medical Center (Hot Springs, AR)
• Parkway Medical Center (Decatur, AL) ⁽²⁾
• Saint Mary’s Regional Medical Center (Russellville, AR)
• Willamette Valley Medical Center (McMinnville, OR)
• Woodland Medical Center (Cullman, AL) ⁽²⁾

In the summer of 2010, Capella completed a public debt financing transaction that positioned the Company for future growth. By taking advantage of attractively priced long-term funding, the Company secured $500 million in senior unsecured notes as well as a $100 million asset-based revolving credit facility. In realigning the Company’s capital structure, Capella now has even greater strength and flexibility in pursuing growth strategies for both the immediate and long-term future.

On July 1, 2011, two additional hospitals joined the Capella Healthcare family when a partnership with Cannon County Hospitals, LLC, was finalized, bringing the company’s presence in its home state to five hospitals:

• DeKalb Community Hospital (Smithville, TN)
• Stones River Hospital (Woodbury, TN)

With a rich history of working together to provide high quality care and excellent service throughout the region, these two facilities joined with Highlands Medical Center (formerly White County Community Hospital) in Sparta in a joint venture to further enhance care for the Upper Cumberland region.  All three facilities are also jointly owned by physicians.

On May 1, 2012, Capella Healthcare and Saint Thomas Health finalized a landmark partnership designed to improve healthcare throughout Middle Tennessee and Southern Kentucky. Based in Nashville, Saint Thomas Health includes five hospitals affiliated with Ascension Health Ministry, the nation’s largest Catholic system and non-profit health system. The partnership resulted in the joint ownership and operation of Capella’s four Middle Tennessee hospitals, including River Park Hospital in McMinnville, Highlands Medical Center in Sparta, DeKalb Community Hospital in Smithville and Stones River Hospital in Woodbury, all in Tennessee. These hospitals now operate as part of the Saint Thomas Health Network, which holds an equity interest. In addition, Saint Thomas Health is the official tertiary care partner for these hospitals. Capella is the managing member and the majority partner in the venture as well as the exclusive development partner for Saint Thomas Health across Middle Tennessee and Southern Kentucky.

On July 1, 2012, Capella expanded its presence further in northeastern Oklahoma when Muskogee Community Hospital joined the Capella Healthcare family of hospitals. The subsequent unification of Muskogee Community with Muskogee Regional Medical Center created one comprehensive health system – now called EASTAR Health System – designed to better serve the healthcare needs of Muskogee and the surrounding communities.

On November 25, 2014 Capella Healthcare and the Medical University of South Carolina (MUSC Health) announced the development of an integrated network and a clinical affiliation agreement that will enable the organizations to partner to enhance the health and wellness of communities in South Carolina. MUSC’s academic expertise, clinical excellence and commitment to education and research, combined with Capella’s proven expertise in running community-based hospitals, come together to create a transformational opportunity with the formation of a regionally-based healthcare delivery network – Capella-MUSC Health Network.

On January 1, 2015, Capella acquired ownership interest in Carolina Pines Regional Medical Center in Hartsville, South Carolina, from Community Health Systems.  The hospital is also partially owned by physicians. It becomes the first hospital to affiliate with Capella-MUSC Health Network.

⁽¹⁾ The official incorporation date was April 18, 2005.

⁽²⁾ Woodland Medical Center was divested in July 2009. Parkway Medical Center was divested in December 2011. Hartselle Medical Center was sold in 2012. Jacksonville Medical Center was divested in 2012. Grandview Medical Center was divested in March 2014.