What happened

Following the announcement of a merger agreement, shares of LifePoint Health (NASDAQ:LPNT), an owner and operator of healthcare facilities in 22 states, rose 33% as of 10:35 a.m. EDT on Monday.

So what

LifePoint Health has announced that it's merging with RCCH HealthCare Partners. RCCH is a healthcare facility operator owned by the private equity giant Apollo Global Management.

Two people in business attire shaking hands

Image source: Getty Images.

Here are the details of the transaction:

  • LifePoint shareholders will receive $65 per share in cash. That values the company at $5.6 billion, including debt, and represents a 36% premium over Friday's closing price.
  • The new entity will be called LifePoint Health.
  • Current CEO William Carpenter III will continue to run the combined business.
  • The deal is expected to close "over the course of the next several months."
  • LifePoint's board of directors have unanimously approved the transaction.
  • LifePoint can continue to shop itself around until Aug. 22, 2018.

Here's the commentary that Carpenter offered investors:

LifePoint and RCCH are aligned in our missions and commitment to ensuring that non-urban communities across the country have access to quality care, close to home. Together, we can extend this shared focus while generating new opportunities for growth and partnerships that will help us navigate the changing healthcare industry dynamics. I am eager to work with the outstanding teams at LifePoint and RCCH as we continue advancing high quality patient care and Making Communities Healthier.

Given the news, it is easy to understand why shares are soaring today.

Now what

This looks to be a done deal since LifePoint's board has already unanimously approved the transaction. In addition, Apollo has already lined up the financing it needs to fund the deal, and it certainly has the financial strength to follow through.

Still, the company does have 30 days to find another potential buyer. While the odds of that happening are probably low, it might make sense for current shareholders to hang on until then, just in case a better offer emerges.

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.