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November 16, 2018

Private equity firm closes deal for hospital’s owner

File Photo/Lawrence Emerson
Fauquier Hospital and its Fauquier Health affiliated businesses rank as the county’s top private employer, with more than 1,000 jobs.
Much about how our hospital operates today – including our dedication to our patients, employees, physicians, and community – will remain the same, and we do not anticipate any changes in how our patients access our hospital and healthcare providers
— Fauquier Health CEO Chad Melton
A “global alternative investment manager,” headquartered in New York, last week completed its purchase of the company that owns Fauquier Health, founded in the 1950s as a not-for-profit community hospital.

Tennessee-based LifePoint Health Inc., formerly a publicly-traded company, purchased 80 percent of Fauquier Health in late 2013 and bought the remaining 20 percent this May.

LifePoint in July announced its planned $5.6-billion sale to funds “managed by affiliates of Apollo Global Management,” a private-equity firm.

No longer trading on Nasdaq, LifePoint’s stock got delisted Friday, Nov. 16 — the day Apollo announced the acquisition’s completion.

The company name will continue, however. LifePoint effectively will merge with and manage RCCH HealthCare Partners, which Apollo owns.

Operating a subsidiary, LifePoint will retain its management and its headquarters in Brentsville, Tenn.

“While there are great opportunities ahead, much about how our hospital operates today – including our dedication to our patients, employees, physicians, and community – will remain the same, and we do not anticipate any changes in how our patients access our hospital and healthcare providers,” Fauquier Health CEO Chad Melton said in a written statement. “People throughout the region can continue to count on our committed staff and physicians at Fauquier Health to provide excellent care that makes our community healthier.”

> Four LifePoint executives get combined $67.5 million in stock awards

David Dill, LifePoint’s new CEO said: “Today marks a historic moment for LifePoint Health and RCCH HealthCare Partners. We are officially one organization dedicated to providing high-quality, community-based healthcare, and I am energized by the opportunities we have ahead of us to serve non-urban communities across the country.”

The combined company will operate 84 “non-urban” hospitals in 30 states.

Mr. Dill succeeds William F. Carpenter III, a LifePoint founder and its board chairman, who retired with completion of the deal.

“Our collective teams — now united as the LifePoint Health team — share a dedication to delivering compassionate, quality care and have a deep bench of expertise in helping healthcare providers in non-urban areas succeed,” Mr. Dill said. “Together, we have the size, experience, resources and drive to be even greater leaders in transforming community-based healthcare for the future.”

LifePoint’s headquarters will remain in Brentwood, Tenn., he added, and it will maintain both organizations’ existing strategic partnerships with well-known leaders in patient safety and clinical quality as it seeks to continue to advance quality care in each of its communities.

Mr. Carpenter will remain a member of LifePoint’s board of directors.

“I’m thrilled that our organizations have come together as one and am incredibly confident in the future of the newly-expanded LifePoint Health under David Dill’s leadership,” he said. “Ultimately, it is the care and services that our hospitals and health systems are providing that are most important, and I know the combined team will continue our legacy of supporting our employees and caregivers so that we are making communities healthier for decades to come.”

Mr. Carpenter will receive $140 million for his 2.2 million shares of LifePoint stock.

LifePoint shareholders will receive $65 in cash for each share of LifePoint’s common stock they owned. That represents a premium of approximately 36 percent above its closing price of $47.90 on July 20, the last trading day before announcement of the merger.

Apollo received financing for the acquisition from Barclays, Citigroup, RBC Capital Markets, Credit Suisse, Deutsche Bank Securities and UBS Investment Bank. PSP Investments Credit USA LLC and an affiliate of Qatar Investment Authority have also provided a portion of the debt financing. The financing also included an equity contribution from funds managed by Apollo and other co-investors.

Goldman Sachs & Co. LLC served as financial advisor and White & Case LLP served as legal advisor to LifePoint Health. Barclays and MTS Health Partners, L.P. served as financial advisors to RCCH, and Akin Gump Strauss Hauer & Feld LLP, Paul, Weiss, Rifkind, Wharton & Garrison LLP and Sidley Austin LLP served as legal advisors.

With approximately $270 billion in assets under management, Apollo has offices in New York, Los Angeles, Houston, Bethesda, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong and Shanghai. Apollo’s managed assets include private equity, credit and real assets funds invested across a core group of nine industries.
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Melrose Carter · November 26, 2018 at 12:25 pm

Overdoses, bedsores, broken bones: What happened when a private-equity firm sought to care for society’s most vulnerable
A rise in health-code violations at the second-largest nursing home chain in the United States began after the Carlyle Group orchestrated a deal that extracted $1.3 billion for investors but left the firm with untenable financial obligations, according to interviews and financial documents.
Melrose Carter · November 20, 2018 at 7:47 pm
A private equity firm is an investment management company that provides financial backing and makes investments in the private equity of startup or operating companies through a variety of loosely affiliated investment strategies including leveraged buyout, venture capital, and growth capital.

This buyout isn't about providing better healthcare for the community!
Melrose Carter · November 20, 2018 at 7:45 pm
Generally businesses that are taken over by "Private Equity Firms" are on their way out of business. The Private Equity Firm sucks all the money they can get out of the business, then after all the stockholders take their cuts, they declare bankruptcy. We plan on looking elsewhere for healthcare, even for simple tests.
Rover 530 · November 17, 2018 at 5:06 pm
Fauquier Hospital is like the "Roach Hotel" check in but you don't check out. Their infection--to-death record is abysmal. FH is good for tests and screenings but not for admission for extended medical care. The ER is OK for severe emergencies but it is better to transfer to another Northern Virginia hospital after you are stabilized. Staff is OK but administration and management suck. An outside investigation is warranted. People and organizations should think twice before donating to anything related to Fauquier Hospital until things are cleaned up.
Zachem56 · November 17, 2018 at 11:45 am
If you click on the red $140 million Mr. Carpenter gets, you’ll see it’s from a Golden Parachute deal made at the time of his employment! Maybe he can share his wealth with the underpaid staff!
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