Capella Healthcare Buying Ownership Interest in DeKalb Community and Stones River Hospitals

June 22, 2011
DeKalb Community Hospital

Capella Healthcare today announced the execution of a definitive Purchase Agreement for a subsidiary that owns a majority interest in White County Community Hospital, LLC, (WCCH) to acquire a 60% ownership interest in Cannon County Hospital, LLC, (CCH) which owns and operates Stones River Hospital (SRH) in Woodbury and DeKalb Community Hospital (DCH) in Smithville. The transaction is subject to customary federal and state regulatory approvals.

Physician investors own the balance of CCH's equity. The minority owners of CCH and WCCH will contribute their ownership interests in the respective joint ventures to a new entity, which, other than Capella is the only member of these joint ventures.

Following the closing of the transaction, which is planned for June 30, Capella Healthcare will manage all three hospitals pursuant to management agreements. Bill Little, who has served as CEO for the two CCH facilities
since July 2009, will assume responsibility for all three hospitals as Market CEO. Current CCH Chief Financial Officer Sarah Clark will become Market CFO for the new entity.

"We look forward to welcoming these outstanding providers to our growing family of hospitals," said Dan Slipkovich, CEO of Capella Healthcare. "These two hospitals have a rich history of serving their communities and
working collaboratively to provide high quality care and excellent service. Along with our physician partners, we look forward to continuing to expand services throughout the region as we build upon this outstanding
network of providers to meet the needs of the entire Upper Cumberland Plateau."

"We are excited about our opportunity to collaborate with Capella and jointly help to lead in molding the future development of healthcare in the Upper Cumberland area," said Hugh Don Cripps, M.D., a member of the
Cannon County Hospital Board and one of the physician partners. "We are blessed to be able to continue to be led so ably by CEO Bill Little and CFO Sarah Clark."

The addition of these facilities expands Capella's Tennessee presence to five hospitals. In addition to White County Community Hospital in Sparta, Capella also owns River Park Hospital in McMinnville and Grandview Medical
Center in Jasper.

About Cannon County Hospital, LLC

Situated in the heart of the state approximately halfway between Chattanooga and Nashville, the two CCH hospitals have worked collaboratively since both became owned by the same group of investors, primarily physicians, in July 2006. There are approximately 80 physicians on the combined medical staffs, representing nearly every medical
specialty.

Established in 1980, SRH is a 60-bed hospital accredited by The Joint Commission. Located at 324 Doolittle Road in Woodbury, the hospital provides 24-hour emergency care as well as surgical procedures, same day
outpatient services, cardiac rehabilitation services, and comprehensive imaging services. Through the Riverside Center, a full range of mental health services for older adults is available, with intensive inpatient
services at a 14-bed gero-psychiatric unit at the hospital and outpatient care at a separate facility in Murfreesboro.

Established in 1969, DCH is a 71-bed hospital also accredited by The Joint Commission. It is located at 520 West Main Street in Smithville, offering 24-hour emergency services and comprehensive diagnostic, medical, surgical
and rehabilitative services. The hospital has enjoyed a long history of medical excellence having been named one of the 100 Top HospitalsĀ® in America by Thomson Reuters (formerly Solucient) for five years.

About White County Community Hospital

Founded in 1929 by Dr. E.B. Clark, White County Community Hospital is a 60-bed facility accredited by The Joint Commission and certified by the American Heart Association as a "Get with the Guidelines" hospital.
Located at 401 Sewell Road in Sparta, the hospital provides a full range of medical services, including 24-hour emergency services and comprehensive diagnostic, medical, surgical and rehabilitative services as
well as a gero-psychiatric unit.

About Capella Healthcare

Capella Healthcare partners with communities to build strong local healthcare systems that are known for quality patient care and exceptional service. Based in Franklin, Tenn., Capella owns and/or operates 13 general
acute-care hospitals in seven states. With the philosophy that all healthcare is local, Capella collaborates with each hospital's medical staff, board and community leadership to take care to the next level. The company has access to significant leadership and financial resources, reinvesting 100% of net cash flow into its family of hospitals to
strengthen and expand services and facilities.

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