Officials from Essent Healthcare and RegionalCare Hospital Partners have confirmed to NashvillePost.com their intention to merge the two companies. The deal will bring RegionalCare’s roster up to seven hospitals in six states.
RegionalCare has said that the deal will not affect the day-to-day operations of 12-year-old Essent, which operates three hospitals in Connecticut, Pennsylvania and Texas. Based on data from American Hospital Directory, the combined company will have revenues of more than $1.5 billion.
“Essent was an attractive partner for us,” said Marty Rash, chairman and CEO of RegionalCare. “Essent’s physician recruitment initiatives and top- quality clinical operations coupled with service expansion opportunities and improving demographic trends in their markets, position these hospitals well for the future.”
Rash also told NashvillePost.com that he feels the companies will be “stronger together.” Mike Browder, Essent’s CEO, who also confirmed the deal, said that he is “extremely excited about the merger,” and that he views the deal as the “next right step for Essent.”
It has been confirmed that Rash, who founded RegionalCare in 2009 and who was part of the team behind Province Healthcare, will man the helm of the combined entity once the deal is closed, which he said will hopefully occur by the end of the fourth quarter. As of now, officials have said that Browder will stay on with the company but that his exact role has yet to be ironed out. Rash noted that there is a “large amount of talent on both teams.”
Browder took the lead at Essent following the departure of former CEO Hud Connery in 2007.
Currently, Essent is a portfolio company of both Vestar Partners and Cressey and Company. RegionalCare is backed by $300 million in funding from Warburg Pincus and runs four hospitals in Alabama, Iowa and Ohio.
“This transaction has all the elements these hospitals need to move to the next level,” said Bryan Cressey, a partner at Cressey & Company and chairman of Essent. “The management team at Essent has built a strong family of hospitals. As part of RegionalCare, these hospitals will continue to build on their strengths and deliver high-quality healthcare services.”
According to the companies, Barclays acted as Essent’s financial advisor for the deal. Kirkland & Ellis and K&L Gates served as its legal advisors. Waller Lansden and Cleary Gottlieb Steen & Hamilton provided counsel for RegionalCare. Citigroup Global Markets, Morgan Stanley and Deutsche Bank also provided committed debt financing to RegionalCare.
Both companies said that the financial terms of the deal are not going to be disclosed. The proposed deal is still subject to regulatory approvals.
NashvillePost.com will update this story with any further details as they become available.