Tennessee-based private hospital operator Ardent Health Services and the majority owner of Portneuf Medical Center, Texas-based LHP Hospital Group, announced Wednesday the two companies have entered into a definitive merger agreement.
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.
“From the local positions we really hope and don’t anticipate that they see any changes at the local hospital levels,” said Tyra Palmer, the vice president of marketing and government relations for Ardent. “The leadership remains the same, and they do amazing things. The more we learn about the hospitals part of LHP and their joint venture partners is very impressive.”
In 2009, LHP purchased Portneuf Medical Center from Bannock County. With the merger, Portneuf Health Trust will remain the minority, not-for-profit owner, and there are local physicians who will retain shares of the hospital.
Ardent’s agreement to acquire LHP will create the second largest private, for-profit hospital operator in the United States, expanding from 14 to 19 hospitals across six states with more than $3 billion in revenues.
Though terms of the purchase were not disclosed, Ventas Inc. — which owns a substantial amount of Ardent’s current real estate, including 10 of its 14 current hospitals and related medical facilities — has issued a commitment to provide secured debt financing in the amount of $700 million to a subsidiary of Ardent.
Through this transaction, Ardent will operate 3,200 patient beds with approximately 18,000 employees, including more than 475 employed physicians. The transaction will diversify and grow the company's quality portfolio of hospitals through partnerships with top-tier, not-for-profit and academic health systems.
“Our hope is to continue following the footsteps of the work and relationships LHP has built,” Palmer said. “By working with the local community leaders, board members and joint venture partners, we want to say, ‘How best can we support the hospitals and the needs of those communities?'”
Palmer added that because LHP’s model fell closely in line with Ardent’s, the merger felt like a natural and good fit.
The transaction is expected to close in early 2017, pending customary regulatory reviews and approvals.
"LHP's decisions have always been driven by our commitment to advance our mission of restoring and enhancing the health of our patients," John Holland, president and CEO of LHP Hospital Group, said in the joint release. "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."