New owner for Lovelace Health System

April 06--Lovelace Health System is about to undergo another shift of ownership in its decades-old history -- this time involving a Chicago-based real estate investment trust company.

Ventas Inc., which has market capital of around $24 billion, announced Monday it has agreed to buy Ardent Medical Services and its affiliate Ardent Health Services, which owns Lovelace, in a $1.75 billion cash deal that is expected to close mid-year.

Ardent Health Services, which currently generates about $2 billion in annual revenues, is owned by private equity funds managed by Welsh, Carson, Anderson & Stowe.

As part of the deal, Ardent Health Services can distribute about $75 million in excess cash to its shareholders, according to a release.

Ventas has plans to separate Ardent's hospital operations from its real estate business and sell them to a newly formed entity owned by the management of Ardent Healthcare services and other equity sources, the release said.

That entity will own the Lovelace Health System, the BSA Health System in Amarillo, Texas, and Hillcrest Healthcare System in Tulsa, Okla.

"This transaction builds upon our excellent track record of executing innovative and value-creating opportunities, and solidifies our leadership position in health care real estate," Ventas Chairman and CEO Debra Cafaro, said in a statement.

Lovelace President and CEO Ron Stern called the deal "very good news for Lovelace Health System."

"It makes for an even stronger parent company in Ardent Health Services, and continued investment and growth in our system," Stern said in a statement, adding that there will be no layoffs.

Lovelace employs more than 3,600 staff and comprises the Lovelace Medical Center and Heart Hospital in downtown Albuquerque; the Lovelace Rehabilitation, Lovelace Women's and Westside hospitals in the metro area, Lovelace Regional Hospital in Roswell; and physician's groups Lovelace Medical Group and Southwest Medical Associates.

"The Ardent Management team will remain in place, including our leadership teams, and David Vandewater, president and CEO of Ardent remain committed to Lovelace Health system, to our employees and to our mission," Stern's statement said.

Lovelace Health System developed from a medical partnership founded in 1922 by William R. Lovelace and Edgar T. Lassetter. The health plan was formed in 1973.

Lovelace underwent a couple of ownership shifts in the 1980s and became wholly owned by Cigna Corp. of Philadelphia in 1991.

In 2003, Nashville, Tenn.-based Ardent Health Services bought Lovelace from Cigna for $211 million, shortly after it also bought St. Joseph Healthcare from Catholic health Initiatives. Ardent merged the two systems and formed Lovelace Sandia Health System.

At the time, Lovelace had its main hospital on Gibson Boulevard, plus a health plan, clinics and multi-specialty physician group practice.

Since then, Lovelace sold the Gibson hospital and transferred its medical center to the former St. Joseph hospital downtown, which it had spent around $60 million to renovate.

Other developments in recent years include:

-- 2007, Lovelace spun off its medical group which became ABQ Health Partners,

-- Lovelace invested heavily in the Lovelace Westside Hospital, a former St. Joseph facility, adding things like birthing and pediatric services,

-- 2012, Lovelace acquired multi-specialty medical practice Southwest Medical Associates in 2012. The parties would not disclose terms of the deal,

-- 2012, Cigna Corp, let its contract with Lovelace for healthcare services lapse and switched to Presbyterian Healthcare Services,

-- 2013, Lovelace sold its insurance operation to Blue Cross Blue Shield of New Mexico after it lost a bid to provide managed care to Medicaid recipients under the new Centennial program that would start Jan. 1, 2014.

-- 2014, Lovelace bought the 26-bed Roswell Regional Hospital and Family Care unit for an undisclosed amount,

-- March 2015, Walgreens, the Deerfield, Ill.-based drug-store chain, announced it was acquiring the Lovelace Retail Pharmacy division, with 11 locations. The pharmacies on Montgomery Boulevard, Carlisle, Tramway at Encantado, Gibson Boulevard, Rio Bravo Boulevard and Coors Boulevard will close on Wednesday . Lovelace pharmacies at Journal Center, Tower at Walter Street, Juan Tabo and one each in Santa Fe and Rio Rancho will be converted to Walgreens pharmacies in May.

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