The combined company would be privately held and led by current LifePoint Chairman and CEO William F. Carpenter III.
Two rural hospital operators announced plans Monday morning to merge in a private-equity deal valued at $5.6 billion.
The combination of LifePoint Health and RCCH HealthCare Partners, both of which are headquartered in Brentwood, Tennessee, would form a single company with 84 non-urban hospitals across 30 states.
LifePoint Health Chairman and CEO William F. Carpenter III—who would lead the combined company as a privately held entity under the LifePoint Health brand name—said the two companies are aligned in their missions.
"Together, we can extend this shared focus while generating new opportunities for growth and partnerships that will help us navigate the changing healthcare industry dynamics," Carpenter said in a statement.
RCCH Chairman and CEO Martin Rash said the combined company's patients, workers, and partners will benefit from its size, scale, and growth-minded focus.
Related: LifePoint Deal Shows Healthcare Services Assets May Be Undervalued
"I am thrilled that these two great companies are coming together," Rash said.
The deal calls for private-equity firm Apollo Global Management, which owns RCCH, to buy LifePoint Health in the $5.6 billion deal, which includes $2.9 billion in net debt and minority interest, according to the announcement.
- Payday for LifePoint shareholders: The deal calls for LifePoint shareholders to receive $65 in cash per share. That's 35.7% higher than their closing price on Friday, as CNBC reported.
- LifePoint shares skyrocket: After closing at $47.90 on Friday, LifePoint shares rose more than 34% on Monday morning to trade above $64.20 apiece by 11 a.m. (Their gain widened to more than 35%, trading as high as $64.90 by early afternoon.)
- Combined financials: Pro forma 2017 revenues for the two companies topped $8 billion, with about 60,000 employees, more than 12,000 licensed beds, and 7,000 affiliated physicians, according to the announcement.
The companies expect to complete their deal "over the course of the next several months," pending shareholder and regulatory approvals.
Related: Allegiance Buys 3 LifePoint Hospitals
There's also a clause in the definitive agreement, however, that permits LifePoint to look for alternative acquisition proposals through August 21.
Editor's note: This story was updated to include additional information about LifePoint share prices early Monday afternoon.
Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.
KEY TAKEAWAYS
The private-equity firm that owns RCCH HealthCare Partners plans to buy LifePoint Health.
The combined company would be based in Brentwood, Tennessee, where each company is headquartered currently.
More than 60,000 people would be employed by the new LifePoint Health, if the planned deal is finalized.