Juniper Newsletter: November 2012

Joint Ventures between Non-Profit and Investor-Owned Hospitals: Uses and Future Applications
James Burgdorfer wrote a paper for the Governance Institute exploring the practical features of “buyer joint venture” transactions. This topic was prompted by the most significant use of the rapidly evolving structure, where Juniper advised Marquette General Health System in Michigan on its $483 million sale to the joint venture company between Duke University and LifePoint Hospitals. This detailed research piece examines the history of these transactions, the objectives of the non-profit participants, and considers potential future applications. Juniper would be happy to address questions about this article, as this subject is a major topic of consideration among the larger hospital systems we advise.

The full article can be found on the Governance Institute website at this link.

Life after a Merger
David Gordon and Barry Sagraves were featured in a recent article discussing hospital merger and acquisition trends in Trustee Magazine. The issues are aimed at board level decisions surrounding transaction valuation, access to capital, and the importance of scale in the post-healthcare reform environment. For more information read here.

Michigan Hospital M&A activity
Juniper has been very active in 2012 advising several nonprofit hospital boards of directors in the state of Michigan. The entrance of new companies like Duke LifePoint as well as large scale intrastate mergers, such as the Beaumont – Henry Ford combination, have paved the way for a dramatic wave of consolidation activity. These state specific trends are summarized here.

Marquette General Health System is acquired by Duke LifePoint
This Fall, Juniper’s client Marquette General Health System in Marquette, MI completed its $483 million sale to Duke LifePoint. This was the largest rural transaction in history and the first competitive, market clearing process in Michigan. The transaction also represents a major advancement in the use and application of the “buyer joint venture” structure. The Attorney General of Michigan published a detailed summary of his review here.

Halifax Regional Health System to Merge with Sentara Healthcare
On October 12th, Juniper’s client Halifax Regional Health System in South Boston, Virginia announced the signing of a letter of intent to merge with Norfolk based Sentara Healthcare. Sentara is one of the leading nonprofit hospital systems in the country with 10 hospitals in Virginia and $2.6 billion in revenue. Details of the merger were made public by the companies in theirjoint press release.

Memorial Medical Center proactively assessing strategic alternatives
On October 3rd Memorial Medical Center in Ludington, MI retained Juniper to provide advice on their strategic financial options and future ownership alternatives. Information on the board’s decision was made available to the local press.

For further information, please contact us at 312.506.3000 or via email.