The Portage Health Board of Directors and LifePoint Hospitals® (NASDAQ: LPNT) have finalized the joint venture agreement to share ownership and operation of Portage Health.
The joint venture will bring $60 million in capital improvements to Portage Health and approximately $40 million to fund a charitable foundation to support critical needs in the community.
“We are pleased to finalize this joint venture and become part of LifePoint,” said Steve Zutter, chairman of the Portage Health board. “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.
“Portage Health plays an important role in healthcare in the Upper Peninsula, and LifePoint is delighted to be its partner,” said LifePoint Chairman and Chief Executive Officer William F. Carpenter III. “We look forward to working with Portage Health’s leadership, physicians, employees and volunteers as we continue to find new ways to enhance healthcare delivery in Hancock-Houghton and throughout the Copper Country region.”
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.
“Our team is excited to partner with LifePoint to strengthen Portage Health for the future,” said Jim Bogan, Portage Health president and CEO. “As part of the LifePoint system, we have great opportunity to make Portage Health an even better place to come for care, practice medicine and work. Together, we can transform healthcare across the Upper Peninsula.”
The joint venture agreement was reviewed and approved by the Attorney General of Michigan, Bill Schuette.