Morningstar | Strong 3Q Results Suggest Pending Merger Is on Track to Close
No-moat LifePoint Health reported third-quarter results that again fell largely within expectations. Same-facility equivalent admissions grew roughly 70 basis points versus last year, and revenue per equivalent admission expanded materially, up 140 basis points. This led to same-facility revenue growth of 2.1% and put the firm's reported net revenue of  $1.557 billion near our estimate for the quarter. The firm also reported strong profitability, with adjusted EBITDA of $183 million roughly in line with our forecast of $178 million for the quarter. With strong operating performance, we think the pending merger with Apollo Global Management's RCCH HealthCare Partners business remains on track to close, and we plan to leave our fair value estimate unchanged from the $65 all-cash offer price.Notably, LifePoint is holding a special shareholder meeting on Oct. 29 to solicit votes to approve the proposed tie-up. We expect the merger to be approved and to close shortly thereafter.
LifePoint Health owns and operates community hospitals, regional health systems, physician practices, outpatient centers, and post-acute facilities. At Dec 31 2017, the company operated 71 hospital campuses in 22 states throughout the U.S., having a total of 9,254 licensed beds. The company's hospitals provide medical and surgical services commonly available in hospitals in non-urban markets. These services include general surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, pediatric services, and, in some of the company's hospitals, specialized services such as open-heart surgery, nursing, psychiatric care and neuro-surgery. In several markets, the company also provides outpatient services.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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