Ishpeming Hospital Bought By LifePoint; Hancock Hospital Joint Venture Deal Reached
ISHPEMING (WWJ) — The board of directors of Ishpeming’s Bell Hospital Monday announced a final agreement for the hospital’s acquisition by Brentwood, Tenn.-based LifePoint Hospitals lnc.
LifePoint also announced a health care joint venture elsewhere in the Upper Peninsula, with Hancock-based Portage Health.
Said Bell Hospital board chairman Robert DellAngelo, M.D.: “We look forward to working with LifePoint to find new ways to strengthen our hospital, enhance the care we provide in our community, and improve the health and well-being of people throughout the Upper Peninsula.”
As part of the final acquisition agreement, LifePoint (Nasdaq: LPNT) will make $5 million in capital investments at Bell over the next decade. Investments will include an improved IT infrastructure, new equipment and facility upgrades. Through the acquisition, the hospital also will have access to support and resources to help it recruit and retain needed physicians, enhance its clinical services to meet the changing needs of its community, and improve its operations in the evolving healthcare environment.
Proceeds from the acquisition transaction have eliminated Bell’s debt. Approximately $4 million in excess proceeds from the transaction is expected to be available. Bell plans to use these funds to support charitable activities in the community. The acquisition also will establish Bell as a local taxpaying organization, which will bring additional revenue to Ishpeming and help support local projects.
Bell is a 25-bed critical access hospital with more than 350 employees. It has more than 90 physicians on its active and consulting medical staff with specialties in family practice, pediatrics, internal medicine, obstetrics and gynecology, orthopedics, urology, emergency medicine, pathology, radiology, ophthalmology and otolaryngology.
Meanwhile, the board of Portage Health and LifePoint announced they had finalized their joint venture agreement to share ownership and operation of Portage Health.
Said Portage Health board chair Steve Zutter: “As we considered Portage Health’s future, our board vetted a number of strategic partner options. This joint venture with LifePoint offered us a unique opportunity to share ownership of Portage Health and gain access to significant resources to grow and expand our services. We are excited for the future.”
As part of the final joint venture agreement, LifePoint and Portage Health will jointly own and operate Portage Health. LifePoint will own 80 percent of the joint venture and Portage Health will have a 20 percent ownership stake. Governance will be equally shared, and an eight-member board with equal representation from Portage Health and LifePoint will be established to ensure that the community has an active voice in Portage Health’s future.
Over the next decade, the joint venture will invest $60 million in capital improvements at Portage Health, including significant investments in technology and equipment and improved facilities. The proceeds from the transaction and retained assets from Portage Health, approximately $40 million, will be used to support the retained businesses of Portage Health and create a locally governed charitable foundation. Also, Portage Health will become a local taxpaying organization, which will bring additional revenue to Hancock and help support local projects.
Both deals were reviewed and approved by Michigan Attorney General Bill Schuette.
Portage Health owns and operates a 36-bed acute-care hospital and a 60-bed skilled nursing unit and related healthcare services in Hancock and Houghton, along with nine other locations throughout the Copper Country.