Score one for the strategic buyers. Community Health Systems Inc. just announced it has signed a deal to acquire Triad Hospitals Inc. for about $6.8 billion. CHS will pay $54 in cash per share and assume $1.7 billion of debt, creating the largest publicly traded hospital company in the U.S. The combined company would own or operate approximately 130 hospitals in 28 states, with a total bed count of more than 18,700.

CHS trumped an existing bid of $6.4 billion made by affiliates of private equity firms CCMP Capital Advisors and GS Capital Partners LP. Triad killed its previous agreement and paid a termination fee. Not so long ago, of course, it would have seemed unremarkable for a strategic buyer to best a PE firm. But in an environment where private equity firms can tap seemingly endless pools of capital - and are regularly outbidding the strategics - the deal is a little more noteworthy.

CHS targets hospitals in non-urban healthcare markets because of their favorable demographic and economic trends and competitive conditions. CHS believes that smaller populations support less direct competition for hospital-based services. The strategic plan outlined on the company’s website says it plans to acquire three to four hospitals a year. Looks like they're well ahead of quota for 2007. Triad shares traded up 5.25%, closing at $51.95.

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