Plano-based LHP Hospital Group Inc. on Wednesday announced it will merge with Nashville-based Ardent Health Services.
The merger will create the second largest private, for-profit hospital in the U.S. with 19 hospitals in six states and $3 billion in revenues, according to a news release. Terms of the transaction were not disclosed.
LHP has five acute-care hospitals in Texas, New Jersey, Idaho and Florida, which are joint venture partnerships. The hospitals include Seton Medical Center in Harker Heights, Texas; HUMC Mountainside in Montclair, New Jersey; HUMC at Pascack Valley in Westwood, New Jersey; Bay Medical Center in Panama City, Florida., and Portneuf Medical Center in Pocatello, Idaho.
Ardent currently operates three health systems with 14 hospitals and employs multi-specialty physicians in nearly 100 clinic locations across New Mexico, Oklahoma and Texas.
Through this transaction, Ardent will operate 3,200 patient beds across six states with approximately 18,000 employees, including more than 475 employed physicians. The transaction will diversify and grow the company’s portfolio of hospitals through partnerships with top-tier, not-for-profit and academic health systems.
Once complete, the Ardent management team will continue to lead the company with the assistance of key LHP executives. Ardent will remain headquartered in Nashville.
“LHP’s decisions have always been driven by our commitment to advance our mission of restoring and enhancing the health of our patients,” said John Holland, president and CEO of LHP Hospital Group. “We recognized we had a unique opportunity to accelerate that mission by joining forces with Ardent and tapping into their exceptional resources, skills, track record and reach.”
The transaction is expected to close in early 2017, pending customary regulatory reviews and approvals. Ardent expects to fund the transaction primarily through secured debt financing, as well as through equity capital provided principally by its majority owner, an affiliate of Equity Group Investments (EGI). Ventas, Inc. (NYSE: VTR) has provided a commitment for secured debt financing for the transaction.
Under the terms of the agreement, Ardent will assume LHP’s management and operational responsibilities within each joint venture partnership. The transaction is not expected to impact the day-to-day operations of the affiliated hospitals.
Citigroup acted as exclusive financial adviser to LHP in this transaction.