NEW YORK (CNNMoney.com) -- Hospital owner HCA agreed Monday to a $21 billion leveraged buyout, plus the assumption of debt, by a group that includes private equity firms as well as the company's founding family and members of management.

Under the deal, HCA (Charts) stockholders will receive $51 in cash, a premium of 6.5 percent from Friday's closing price, and below the price at which the stock traded in late 2005 and early 2006. The purchase also includes the assumption of $11.7 billion in debt.

Shares had shot up in heavy trading on July 20, the day after the Wall Street Journal reported that there had been negotiations of an LBO, but that the deal had fallen apart in a disagreement over price. The $51 purchase price is a nearly 17 percent rise from its July 19 closing price.

Shares of HCA opened at $49.80 Monday following the announcement.

The buyers include private equity firms Bain Capital, Kohlberg Kravis Roberts & Co., and Merrill Lynch Global Private Equity, a unit of investment bank Merrill Lynch (Charts). The deal is one of the largest LBO's on record, nearly reaching the $25 billion record set in the 1989 buyout of RJR Nabisco.

Also included among the buyers is HCA Founder Thomas F. Frist Jr., who had been chairman, CEO and president of the company from 1988 to 1994 and is still a member of the board. Frist is the brother of Senate Majority Leader Bill Frist, R-Tenn.

Under the merger agreement, HCA may solicit superior proposals from third parties during the next 50 days, according to the company's statement.

HCA is the nation's No. 1 publicly traded owner of hospitals and health care facilities, with more than twice the revenue of the No. 2 company in the field, Tenant Health Care (Charts). As of June 30, HCA's wholly owned and partially owned subsidiaries included 176 hospitals, 92 freestanding surgery centers and other facilities.

The company reported revenue of $24.5 billion in 2005 and net income of $1.4 billion. It has about 190,000 employees. While it's shares have lost about 10 percent of their value over the last 10 months before Monday's deal, it has outperformed many competitors in the sector, such as Tenant and Triad Hospitals (Charts).

But the Nashville-based company has been shedding some of its hospitals not in major urban or suburban areas. In 2006 it sold four Virginia and West Virginia rural hospitals for $239 million. In 2005 HCA sold five hospitals in Louisiana, Oklahoma, Tennessee, and Washington for about $260 million.

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