A LifePoint holding. Photo by Google Street View.

BRENTWOOD, TN–An affiliate company of Apollo Global Management has agreed to buy out LifePoint Health, a locally-based hospital chain, for $5.6 billion. Structured as a merger with RCCH HealthCare Partners, which is owned by Apollo, the purchase price also includes $2.9 billion of net debt and minority interest and represents a premium of approximately 36% to LifePoint's closing share price on July 20, 2018. Under the deal, LifePoint shareholders will receive $65.00 per share in cash for each share of LifePoint common stock they own.

The combined company will be privately held, operate under the LifePoint Health name and be led by William F. Carpenter III, chairman and CEO of LifePoint. It is expected to deliver pro forma 2017 revenues of more than $8 billion and will have more than 12,000 licensed beds in its portfolio, which includes 84 non-urban hospitals in 30 states.

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The transaction is expected to be completed over the course of the next several months, subject to customary closing conditions, including approval by LifePoint's shareholders and regulatory approvals.

Under the terms of the agreement, LifePoint may actively solicit alternative acquisition proposals agreement, until August 22, 2018.

An Attractive Target

Healthcare has been an attractive target for private equity companies, drawn by the sector's high returns and strong public valuations.  Last month, for example, KKR said it would acquire Envision Healthcare in an all-cash deal valued at $9.9 billion that includes debt.

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Erika Morphy

Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.