PE firm made $1.6B by selling LifePoint to fund it owns

Apollo Global Management, a New York City-based private equity firm, made a $1.6 billion gain by selling its stake in Brentwood, Tenn.-based LifePoint Health to itself, Bloomberg reported July 29.  

Apollo Global completed the sale of LifePoint to a different Apollo fund, Fund IX, in June. The PE firm sold LifePoint for $2.6 billion, after it invested about $975 million in the rural hospital chain. Fund IX, a $24.7 billion fund, agreed to buy LifePoint in April of this year and advisory boards from both funds approved the deal.

"We worked with fund investors, independent advisers and multiple new co-investors to reach a fair and attractive transaction for both funds," Apollo spokesperson Joanna Rose, told Bloomberg. "This was a unique transaction for Apollo, and we are proud to continue supporting the company and its mission."

The sale was approved after Apollo told Fund IX investors that they would likely gain from their investment in LifePoint, because it has more than $2 billion in cash that could be used to expand the business. In June, LifePoint began executing its growth strategy through entering a deal to buy Louisville, Ky.-based Kindred Healthcare. 

"This is a great outcome for both funds," Apollo said in June, according to Bloomberg, "with a successful realization for Fund VIII and an opportunity for Fund IX to back a proven management team in continuing to invest in local health care, build the platform and generate attractive returns."

Apollo created LifePoint through the purchase of three regional hospital chains in 2015, 2016 and 2018, according to Bloomberg. LifePoint has grown substantially and now operates 87 hospitals across the U.S. 

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