Capella, RegionalCare to merge into new $1.7B company: 10 things to know

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Franklin, Tenn.-based Capella Healthcare and Brentwood, Tenn.-based RegionalCare Hospital Partners have announced plans to merge, creating a combined company with 18 hospital campuses in 12 states.

Here are 10 things to know about the deal.

1. The combined company's name will be RCCH Health Partners.

2. Under the agreement, Capella will be fully owned by RegionalCare, which was sold to Apollo Global Management last year.

3. Birmingham, Ala.-based Medical Properties Trust purchased Capella for $900 million in 2015. MPT will receive approximately $390 million for its equity investment and loans made as part of its 2015 transaction with Capella. Under the agreement, MPT will also receive about $210 million in mortgage loan prepayment for two Capella hospitals.

4. MPT's net proceeds from the transaction are expected to be about $550 million, which will be used to reduce MPT's debt.

5. Marty Rash, board chair and CEO of RegionalCare, will serve as executive board chair of RCCH Health Partners.

6. Regarding the merger, Mr. Rash said, "By creating a single, stronger organization, we'll have greater scale and stability as well as an expanded geographical reach."

7. Michael Wiechart, board vice chair, president and CEO of Capella, will serve as president and CEO of the combined company. He will also serve on RCCH Health Partners' board of directors.

8. The deal is subject to customary regulatory approval and is expected to close during the second quarter of 2016.

9. The combined company would include more than 13,000 employees, 2,000 affiliated physicians and $1.7 billion in revenues.

10. Rhoda Weiss, PhD, a Los Angeles-based national healthcare strategy and marketing consultant, follows healthcare mergers and partnerhips closely. Regarding the Capella-RegionalCare deal, she told Becker's, "It certainly makes a lot of sense for these two organizations that are nearly identical in size to work together. It's an exciting move for both and definitely covers a wide region of the country with no overlap. It will also make this new system much more attractive for other potential partners in those 12 states they cover." Dr. Weiss has never worked for either of the organizations involved in the transaction.

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