LifePoint Inks $250M Deal With Medical Properties Trust, Springstone Health Opco’s Management Group

LifePoint Health Inc. will acquire a majority stake in Springstone Health Opco’s management group U.S. Behavioral Partners. The deal values the company at $250 million.

LifePoint Health, a Brentwood, Tennessee-based diversified health care operator, will pay $200 million to satisfy a debt interest that health care REIT Medical Properties Trust Inc. (NYSE: MPW) holds with U.S. Behavioral Partners from a previous deal.

Medical Properties Trust will retain a minority interest in U.S. Behavioral Partners. It will also maintain ownership of the facilities that U.S. Behavioral Health operates following the close of the deal, the release states.

The deal is expected to close in the first half of 2023, according to a news release.

LifePoint remained tight-lipped about the details and what that means for the future of the company and for U.S. Behavioral Partners.

“We are excited about the prospect of welcoming Springstone to the LifePoint network,” Emily Serck, vice president of communications for LifePoint, said in an email. “However, this potential transaction is still in its very early stages.”

Representatives of U.S. Behavioral Partners and Medical Properties Trust have not responded to requests for comment.

In 2010, the PE firm Welsh, Carson, Anderson & Stowe (WCAS) invested $100 million in Louisville, Kentucky-based U.S. Behavioral Partners’ predecessor Springstone Inc.

Springstone Inc. focused on building a system of de novo inpatient addiction and psychiatric hospitals and outpatient locations. In 2021, WCAS sold Springstone to Medical Properties Trust.

That deal had a price tag of $950 million. About $750 went to acquiring the Springstone facilities while about $200 million of debt financing went to the new operating company for Springstone owned by Springstone’s management, U.S. Behavioral Partners.

Today, U.S. Behavioral Partners operates Springstone’s 18 addiction and psychiatric hospitals and 35 outpatient sites in nine states.

“Adding the talented team at Springstone’s depth of experience and platform for providing high quality behavioral healthcare will accelerate our ability to broaden these crucial services for communities that need them,” David Dill, chairman and CEO of LifePoint Health, said in a release.

Before the deal, LifePoint owned and operated three inpatient behavioral health facilities it obtained through its deal to acquire parts of Louisville, Kentucky-based Kindred Healthcare.

Following this deal with Medical Properties Trust and U.S. Behavioral Partners, LifePoint will operate more than 60 behavioral health units at hospitals and in community sites as well as 21 inpatient behavioral health facilities.

LifePoint, owned by the private equity firm Apollo Global Management LLC, will have more than 315 health care sites that include community hospital campuses, rehabilitation hospitals and post-acute care facilities after the deal closes.

Medical Properties Trust said in a news release that the deal demonstrates its interest and ability to profitably acquire health care companies, run them for a time, separate them from their real estate and flip the resultant operating companies.

Medical Properties Trust is also one of a handful of health care REITs that have an interest in the behavioral health space — a space that’s so fragmented and underdeveloped that it hasn’t seen major investment in the real estate aspect of the sector.

Of late, health care REITs with high exposure to the senior housing and skilled nursing industries are looking at behavioral health — especially addiction treatment — as a pivot play for struggling facilities as well as a place for growth.

CareTrust REIT Inc. (Nasdaq: CTRE), which operates senior-focused 228 facilities in 29 states, has a deal with Landmark Recovery to convert some facilities into addiction treatment facilities. However, CEO David Sedgwick said the behavioral health industry “is very fragmented and immature, in terms of institutional quality, management and, and credit.”

Sabra Health Care REIT Inc. (Nasdaq: SBRA) started exploring the behavioral health space seriously in 2017. It is now investing $800 million into behavioral health as part of its plans to diversify its portfolio.
Ventas Inc. (NYSE: VTR), one of the largest owners of health care real estate in the U.S., acquired a 72-bed in-patient facility operated by Eating Recovery Center for $58 million.