After a little more than seven months, Floyd Memorial Hospital and Health Services’ Board of Trustees, the Floyd County Commissioners and the Floyd County Council have announced the intent to pursue an acquisition of Floyd Memorial Hospital and Health Services by Baptist Health.
Floyd Memorial and Baptist Health are entering into a non-binding agreement that allows them to move forward with necessary steps to pursue a proposed acquisition. Following the due diligence and negotiation process, which is expected to take approximately 90-120 days, the organizations would then finalize a binding asset purchase agreement, which would be subject to the review and approval of the Floyd Memorial Board of Trustees, Floyd County Council and Commissioners. Assuming the purchase agreement is approved, we anticipate the binding asset purchase agreement being signed by July 1, 2016 and the actual transition taking place on or before October 1, 2016.
“We are encouraged by the possibilities this acquisition will provide for the Southern Indiana residents we serve. As we look to the future, we anticipate expanding our service offerings, which will ensure Floyd Memorial remains the premier hospital in Southern Indiana and the primary referral center for all of our surrounding counties,” said Dan Eichenberger, MD, Floyd Memorial President and CEO.
The proposed acquisition includes a guaranteed capital investment of $125 million over the next five years to expand services, invest in improved technologies and transition to Epic, one of the highest-rated information technology platforms in the nation.
“When this process began, Floyd Memorial was in a position of strength, which provided us with many favorable options to choose from to ensure we were forming the best partnership for our hospital, county, patients, associates and physicians,” Dr. Eichenberger added.
“This is a great day for the health of our community,” said Baptist Health CEO Steve Hanson. “Baptist Health has worked for more than 90 years to provide high-quality healthcare to our communities, up to now mostly in Kentucky. It’s fitting that, as we work toward a new, more proactive approach to healthcare, we also expand geographically to build an even more cohesive health system that includes this wonderful organization in Southern Indiana. We are very excited about welcoming Floyd Memorial Hospital and Health Services to the Baptist Health Family.”
Hospital administration sees this pending acquisition as an opportunity for the organization and the patients it serves to reap the benefits of greater economies of scale through improved operational efficiencies and synergies, ensure high-quality, comprehensive healthcare services for our community to continue far into the future and better preparation for the next phase of healthcare transformation.
In addition to the anticipated benefits to both Floyd Memorial and the patients it serves, Floyd County will also greatly benefit from this transaction. At closing, Floyd County expects to receive approximately $75 million after paying transaction costs. In addition, the County will receive another $75 million to be spread over the next 10 years, some of which will be designated for ongoing healthcare related needs and activities.