Apollo Global Management LLC will buy hospital chain LifePoint Health Inc. for $65 a share, expanding the private equity firm’s ambitions in rural health care.
The deal values LifePoint at $2.52 billion, or $5.6 billion including debt and a minority interest, the firms said in a statement Monday. The price is a 36% premium to where LifePoint shares closed on July 20, before news of a potential takeover was reported.
LifePoint will be merged with RCCH HealthCare Partners, an Apollo-owned hospital company that runs 16 regional health care systems in 12 states, according to its website. The combined company will operate under the LifePoint name.
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The rural hospital business can be challenging, with facilities closing amid stagnant reimbursements and patient volumes. Yet the facilities are often a key source of care in their regions, and can be enticing for investors like Apollo.
LifePoint, based in Brentwood, Tennessee, is a major addition to Apollo’s health care bet. The company operates 71 hospitals in non-urban areas across 22 states including Tennessee, Kentucky and North Carolina. The company has said it expects to generate about $6.4 billion in revenue this year.