LifePoint Hospitals said it would acquire Province Healthcare Co., another investor-owned rural hospital chain, for $1.7 billion in stock, cash and assumed debt. Both companies are based in Brentwood, Tenn. Province shareholders would have about a 30% stake in the combined company. The deal requires the approval of each company's stockholders and also would require various regulatory approvals, partly because the companies are planning the transaction as a tax-free stock swap. Federal approvals would include antitrust clearance from the Federal Trade Commission and approval by the Securities and Exchange Commission of the proxy and other filings needed to complete the deal, LifePoint officials said in a conference call.
In a news release, LifePoint said the deal will diversify its hospital portfolio beyond its strongholds in Kentucky and Tennessee and will add to its earnings immediately. The deal is expected to be completed in the first half of 2005. LifePoint also said it expects to reduce costs by $15 million to $18 million by consolidating certain services, such as corporate offices, accounting, legal and financial services, compliance programs and supply expenses. Province shareholders would receive cash and stock worth nearly $23 per share, a 66% premium above the $13.61 closing price of the company's shares Friday. The combined company would own 50 hospitals, including 47 that are sole community providers, in 19 states. -- by Vince Galloro