Bell Hospital Signs Letter of Intent to be Acquired by LifePoint Hospitals
Bell Hospital, a stand-alone 501(c)3 in Ishpeming, Michigan, has signed a letter of intent to be acquired by 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.
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 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 is a publicly traded company that owns 57 hospitals in 20 states and generates over $3.5 billion in revenue annually. LifePoint also announced on February 28th that it intends to form a joint venture with Portage Health in Hancock, MI. These transactions further the original concept behind Superior Health Partners, a collection of 8 hospitals in Michigan’s Upper Peninsula that hope to work more collaboratively with one another.