Executives at Brentwood, Tenn.-based LifePoint Hospitals and Fauquier Health in Warrenton, Va., have signed a memorandum of understanding to form a joint venture, as LifePoint continues an active hand in the hospital merger and acquisition market.
Financial details of the deal were not disclosed. The nonbinding agreement authorizes LifePoint and Fauquier Health to enter a due diligence period, where both parties will hammer out final terms of the deal before signing a definitive joint venture agreement, which is expected in a few months. Virginia's attorney general would also have to review and approve the deal.
Under the proposed transaction, LifePoint would obtain a majority ownership interest in Fauquier Health, though the news release did not say what LifePoint's exact stake would be. However, governance would still be shared equally between the two organizations.
The proceeds from the deal would clear Fauquier Health's debt, create a new charitable foundation and convert the system into a for-profit entity. LifePoint would also invest an undisclosed sum into Fauquier Health's facilities and new technology, and the two would also work together to boost physician recruitment.
Fauquier Health includes the 97-bed Fauquier Hospital, a 115-bed long-term care and rehab facility and nine physician offices. The hospital would be LifePoint's sixth within Virginia.
LifePoint has been an active force in the hospital M&A market over the past week. In addition to this proposed deal, LifePoint executives also are pursuing acquisitions of Bell Hospital in Ishpeming, Mich., and Portage Health in Hancock, Mich. The deals come as LifePoint recorded a slow fiscal year 2012. The for-profit hospital operator's profit was down 6.8 percent.
Financial details of the deal were not disclosed. The nonbinding agreement authorizes LifePoint and Fauquier Health to enter a due diligence period, where both parties will hammer out final terms of the deal before signing a definitive joint venture agreement, which is expected in a few months. Virginia's attorney general would also have to review and approve the deal.
Under the proposed transaction, LifePoint would obtain a majority ownership interest in Fauquier Health, though the news release did not say what LifePoint's exact stake would be. However, governance would still be shared equally between the two organizations.
The proceeds from the deal would clear Fauquier Health's debt, create a new charitable foundation and convert the system into a for-profit entity. LifePoint would also invest an undisclosed sum into Fauquier Health's facilities and new technology, and the two would also work together to boost physician recruitment.
Fauquier Health includes the 97-bed Fauquier Hospital, a 115-bed long-term care and rehab facility and nine physician offices. The hospital would be LifePoint's sixth within Virginia.
LifePoint has been an active force in the hospital M&A market over the past week. In addition to this proposed deal, LifePoint executives also are pursuing acquisitions of Bell Hospital in Ishpeming, Mich., and Portage Health in Hancock, Mich. The deals come as LifePoint recorded a slow fiscal year 2012. The for-profit hospital operator's profit was down 6.8 percent.
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