WEST VIRGINIA — Lument Securities has brokered the sale of four state-owned long-term care communities totaling 511 beds in West Virginia to Marx Development Group (MDG) for $60 million. Majestic Care, a subsidiary of MDG, is taking over operations at the communities in the wake of the transaction, which closed on Oct. 31.
The sale includes the Hopemont Hospital in Terra Alta, Jackie Withrow Hospital in Beckley, John Manchin Sr. Health Care Center in Fairmont and Lakin Hospital in West Columbia.
MDG has committed an additional $80 million to major investments in West Virginia, with plans to build at least three new long-term care facilities, using local labor and materials wherever possible. That brings the total value of the transaction to $140 million.
The seller selected New York City-based MDG based on its strong track record, in-house operator Majestic Care, and ability to serve as a vertically integrated developer with the expertise and capital to construct new communities, states Lument.
Before the sale, the state-operated facilities were running at a loss of about $6 million per year, with future costs projected to continue rising from the current level of around $40 million per year, according to West Virginia Gov. Patrick Morrisey.
“This marks an important milestone in our work to strengthen healthcare services and modernize the state’s operations,” said Morrisey in a press release. “West Virginia patients can look forward to enhanced care, modernized facilities and a commitment to quality care. This is another step forward in improving care outcomes for our patients while protecting taxpayer dollars.”
All employees of the four long-term care facilities have the opportunity to continue their employment with the new ownership at the same compensation, and tenure is being fully recognized by the new company. Patient care will go uninterrupted during the transition process.
Laca Wong-Hammond, managing director and head of mergers and acquisitions for Lument, orchestrated the sale on behalf of the state of Virginia.
Lument led an extensive marketing campaign targeting investor groups with operational expertise. The result was an active bidding environment — more than 140 parties indicated interest, 62 moved forward to signing non-disclosure agreements and nearly a dozen parties submitted letters of intent.
“Being selected by a state government to serve as its sell-side M&A advisor is truly an honor,” says Wong-Hammond. “We were trusted to not only deliver a sale price that exceeded expectations, but also ensure continuity of care and employment, as well as obtain funds for reinvestment into local communities. We’re proud to say this outcome delivered on all fronts.”