Baptist Health in Louisville, Ky., has entered into a nonbinding agreement to acquire Floyd Memorial Hospital and Health Services, a 236-bed acute-care hospital in New Albany, Ind.
The $150 million purchase will expand Baptist Health services into southern Indiana. The eight-hospital system currently operates mainly in Kentucky. The acquisition is expected to be complete by Oct. 1.
Under terms of the agreement (PDF), Floyd County will receive $75 million from Baptist initially, and then an additional $75 million over the next 10 years. Some of the funds will be designated for healthcare needs.
Baptist Health will also provide $125 million in capital investments for Floyd Memorial to expand services, improve technology and transition its electronic health record to Epic Systems Corp., which is Baptist Health's vendor.
The not-for-profit said it is “well-positioned” financially to invest in Floyd Memorial. In 2014, Baptist Health reported an operating surplus and $2.15 billion in operating revenue.
“It's fitting that as we work toward a new, more proactive approach to healthcare, we also expand geographically to build an even more cohesive health system that includes this wonderful organization,” said Steve Hanson, CEO of Baptist Health, in a news release.
Floyd Memorial began to seek an acquisition partner in August 2015 (PDF) to better adapt to “challenges” in the healthcare industry, including population health management.
Floyd Memorial is a leading provider in southern Indiana. The hospital had approximately 14,500 inpatient admissions in 2015 and reported $322 million in operating revenue.
As part of the acquisition, the name of the hospital is expected to change to reflect Baptist Health ownership. All current staff is expected to stay on.