Portage Health, a stand-alone 501(c)3 hospital in Hancock, Michigan, has signed a letter of intent to form a whole hospital joint venture with LifePoint Hospitals. This transaction, valued at over $100 million, is the first joint venture of its kind in the state of Michigan. It will create one of the largest charitable foundations in the state and afford the local board of director’s substantial local control over parent company level decisions via a 50% blocking interest.
The board of directors of Portage engaged Juniper Advisory to proactively assess their strategic options, as well as to implement a competitive process to evaluate transaction alternatives. Juniper designed and managed a marketing process that included identification of potential suitors, drafting information materials, populating an electronic data room, conducting reverse due diligence, and negotiating and executing the joint venture transaction.
Portage is the dominant healthcare provider in the western portion of Michigan’s Upper Peninsula. The hospital offers a full spectrum of medical capabilities and maintains strong ties with Michigan Technological University, a leading science, engineering, and research institution located in Houghton, MI. The hospital enjoys a strong operating condition with a 12% EBITDA margin. It is a major center of economic activity and employment in the region. In creating this partnership, the Board sought to proactively position the financial capabilities of the hospital and maximize its opportunities to thrive in the future.
LifePoint Hospitals is a publicly traded company that owns 57 hospitals in 20 states. It generates over $3.5 billion in revenue annually and is widely followed by institutional research analysts. LifePoint’s joint venture with Duke University, Duke LifePoint, acquired Marquette General Health System in September, 2012. This was the company’s first acquisition in Michigan and represented a major expansion and financial commitment. The joint venture with Portage is an effort to further develop a well capitalized network of care across the region.
For additional information, please refer to the Portage press release.