Wisconsin’s Watertown Regional Medical Center said it has entered into a joint venture with LifePoint Health to share ownership of the hospital, the healthcare providers announced on Friday.
The deal is subject to approval by the state’s attorney general.
LifePoint Health, which just this week renamed itself from LifePoint Hospitals, said it will hold an 80 percent stake in the hospital while the remaining 20 percent will be held by the Watertown community. However, the hospital will be run will equally pending the creation of a new board that represents both interests.
[Also: LifePoint Hospitals changes name to LifePoint Health]
Under terms of the deal, LifePoint will invest $100 million into the medical center over the next decade to be used to upgrade technology and expand services at the hospital. Other proceeds from the deal will go towards paying off Watertown’s debt and establishing a charitable foundation.
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“Over the last century, the value of WRMC has been built, in part, on our community’s support. With the creation of our foundation, we can return this support by funding programs that will benefit the health and wellness of our region,” said Jeff Baum, existing chairman of the medical center, in a statement.
The deal highlights a trend towards joint ventures as alternatives to costly mergers or acquisitions. Recently, Tenet Healthcare took a big stake in a chain of ambulatory surgery centers. That company, one of the biggest for-profit chains in the healthcare field, has said it plans more joint ventures over mergers.
[See also: Tenet takes majority stake in ambulatory company]
Watertown recently scored 4 stars in the Centers for Medicare and Medicaid Services rankings for patient experience as well as an ‘A’ in Leapfrog’s latest rankings.
LifePoint operates community hospitals, regional health systems, physician practices, outpatient centers and post-acute facilities in 20 states. The company, whose shares trade on the Nasdaq, has a current market capitalization of $2.2 billion.
Twitter: @HenryPowderly