Bell Hospital Joins LifePoint Hospitals
Bell Hospital, a stand-alone 501(c)3 in Ishpeming, MI, has joined LifePoint Hospitals. This strategic partnership will ensure the future viability of the hospital and maintain healthcare services in the Ishpeming community. As part of the transaction, Bell will retire all of its financial obligations, fund a charitable foundation with the proceeds, and create one of the few debt-free hospitals in the state of Michigan.
Juniper’s Role
The board of directors of Bell engaged Juniper Advisory to evaluate their ownership alternatives, as well as to manage a competitive sale process to maximize their objectives through a business combination transaction. Juniper designed and implemented a bidding process that included identification of over a dozen potential suitors, analyzing the economic features of the proposals for the board, and negotiating the terms and conditions of the transaction.
Bell Hospital
Bell Hospital constructed a state-of-the-art replacement facility in 2008. Since that time, the company has suffered several years of deteriorating financial condition. The hospital has operated with acute credit and solvency concerns stemming from a heavy burden of bond interest payments, a large underfunded pension liability, and out of the money interest rate swaps. The transaction’s financial provisions were modeled to address Bell’s debt constraints, which total over 70% of the capital structure. The Bell board hopes to improve clinical quality, enhance information technology systems, and solidify its role as a strong regional employer going forward.
LifePoint Hospitals
LifePoint is a publicly-traded company that owns 60 hospitals in 20 states. It generates over $3.5 billion in revenue annually and is widely followed by institutional research analysts. LifePoint’s joint venture with Duke University, Duke LifePoint, acquired Marquette General Health System in September 2012. This was the company’s first acquisition in Michigan and represented a major expansion and financial commitment. The joint venture with Portage is an effort to further develop a well-capitalized network of care across the region.
For additional details on this transaction, please refer to this article from The Wall Street Journal.