LifePoint Health has signed a definitive agreement to acquire Kindred Healthcare, LLC, the two companies announced late Monday. The deal brings together two major players in the acute and post-acute healthcare market. LifePoint Health, a subsidiary of RCCH HealthCare Partners, owns and operates community hospitals, regional health systems, physician practices, outpatient centers and post-acute facilities across the country. Kindred Healthcare is the nation’s leading specialty hospital company delivering acute health services in its long-term acute care hospitals, inpatient rehabilitation hospitals, acute rehabilitation units, and behavioral health line of business, all specializing in treating the most medically complex patients. No financial terms were disclosed. The deal is expected to close in the fourth quarter.
Both LifePoint and Kindred Healthcare have experienced some major ownership changes in the past few years. In 2018, RCCH HealthCare Partners, a portfolio company of Apollo Global Management, took LifePoint Health private in a $5.6 billion deal, (0.89x and 8.39x 2018 revenue and EBITDA, respectively). At the time of the deal, LifePoint Health had 68 hospitals and has since grown to 87 hospitals, according to the company’s website.
In 2017, Humana Inc. (NYSE: HUM), TPG Capital and Welsh, Carson, Anderson & Stowe teamed up to purchase Kindred Healthcare, Inc. for $4.1 billion and immediately broke out the different divisions of the company into separate entities. Kindred’s home health, hospice, and community care businesses were separated from Kindred and operated as a stand-alone company owned 40% by Humana and 60% by TPG and WCAS called Kindred at Home. Kindred’s LTAC hospitals, IRFs and contract rehabilitation services businesses became Kindred Healthcare, LLC owned just by TPG and WCAS.
Humana actually acquired the remaining 60% stake in Kindred at Home valued at $5.7 billion back in early May.
The combination of LifePoint Health and Kindred Healthcare creates a leading community healthcare platform with a full array of services in the acute and post-acute care market. LifePoint will invest $1.5 billion over the next three years in staff, capital projects and technology and digital solutions.
Barclays and Guggenheim Securities, LLC are serving as financial advisors to Kindred and Debevoise & Plimpton LLP and Mintz Levin are serving as legal counsel to Kindred. Financing for the transaction is being provided by Barclays, Citi, and RBC Capital Markets. Citi and RBC Capital Markets are also acting as financial advisors to LifePoint Health. Sidley Austin LLP and Paul, Weiss, Rifkind, Wharton & Garrison are serving as legal counsel to LifePoint Health.
