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Apollo reportedly wavered before finalizing $5.6B LifePoint deal

Private equity firm Apollo Global Management reportedly withdrew its offer and ended negotiations to purchase Brentwood, Tenn.-based LifePoint Health before eventually finalizing a deal to acquire the 68-hospital system for $5.6 billion including debt, the Nashville Post reports.

Recent regulatory filings with the U.S. Securities and Exchange Commission show Apollo and LifePoint Health began negotiating a potential sale in September 2017, during which Apollo bid $60 per share in cash for the health system. Two other investment firms interested in a potential sale declined to submit bids, leaving Apollo as the sole party LifePoint was negotiating with at the time.

However, LifePoint saw revenues decline in the fourth quarter of 2017, and the system ended the period with a net loss. After the release of LifePoint's financials in February, Apollo issued a revised bid to the company in April offering $58 to $60 per share — roughly 10 percent less than its original offer in the fall of 2017.

Apollo raised its offer to $61 per share in May after continued negotiations. LifePoint told the firm's leadership an unidentified strategic buyer had offered to pay $65 to $68 per share, and asked if Apollo would be willing to raise its offer back up into the mid-$60s.

On June 1, Apollo declined to do so and pulled its offer to acquire LifePoint. The health system proceeded to negotiate a sale agreement with the second party; however, the unidentified party ended negotiations June 18.

LifePoint turned back to Apollo, and the organizations eventually settled on a price of $65 per share in cash, worth about $2.7 billion. As part of the deal, Apollo would also assume LifePoint's $2.9 billion of net debt and minority interest.

Under the agreement, LifePoint will merge with RCCH HealthCare Partners, a 16-hospital system in Brentwood, Tenn. Apollo subsidiaries acquired the system in 2015, the Nashville Post reports.

To access the full report, click here.

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