Rennova Health Inc , a vertically integrated provider of industry-leading diagnostics and supportive software solutions to healthcare providers, announced today that it has entered into an Asset Purchase Agreement and paid a deposit to acquire certain assets related to Scott County Hospital, based in Oneida, Tennessee.
Prior to closing in July 2016, Scott County Hospital was classified as a Critical Access Hospital (rural), had 25 beds, operating rooms and a Laboratory that provided a complement of ancillary diagnostic services, as well as an emergency department capable of operating 24/7. The purchase includes a 52,000 sq. ft. hospital building and 6,300 sq. ft. professional building on approximately 4.3 acres. The hospital was one of a group of seven hospitals that entered Chapter 11 bankruptcy in early 2016.
Rennova entered into an agreement to acquire the assets out of bankruptcy for approximately $1,000,000, which includes $400,000 owed to a local bank that has a lien on the property. The bankruptcy court issued an order on December 23rd thereby making the purchase agreement effective. Closing of the purchase is expected to take place in early January 2017. The hospital has a number of licenses that need to be reinstated and is party to a number of in-network contracts with payers. Subject to obtaining requisite government and other approvals and licenses, Rennova believes the hospital will reopen in part in the 2nd quarter of 2017 and is working towards having the hospital in full operation by the 3rd quarter of 2017.
The hospital had unaudited annual revenues of approximately $12 million for 2015. These revenues were attributable to the typical services of a rural acute care hospital, including emergency room visits, outpatient procedures, diagnostic ancillary tests, physical therapy and inpatient hospital stays. Based on the hospital's historical information, Rennova believes it offers a predictable patient base with predictable revenues as it serves the general healthcare needs of its community and supports local physicians.
"This acquisition is further demonstration of Rennova's efforts to grow our business in a direction that will secure more predictable, recurring revenue for the provision of health care services and our state of the art solutions," said Seamus Lagan, CEO of Rennova. "A Rural Critical Access Hospital creates certain opportunities for Rennova to leverage its existing knowledge and services for the benefit of the hospital and surrounding physicians. We have hired specific expertise to oversee this project and believe we can reinstate the majority of the team from the local community that previously operated the hospital successfully. We look forward to proving and expanding this rural hospital model in the coming years."
About Rennova Health, Inc.
Rennova Health provides industry-leading diagnostics and supportive software solutions to healthcare providers, delivering an efficient, effective patient experience and superior clinical outcomes. Through an ever-expanding group of strategic brands that work in unison to empower customers, we are creating the next generation of healthcare. For more information, please visit www.rennovahealth.com.