CHICAGO - Two Illinois hospital systems that signed a letter of intent to merge in November have canceled the proposed combination.
The decision to end the merger attempt by Rockford Health System and Cadence Health was mutual, after the two could not reach agreement that "would provide mutual benefit" to both systems, Rockford Health System said in a statement. Cadence said there were differences of opinion that prevented an alignment of operational strategies.
The merged system would have retained the Cadence name and operated 40 locations including four hospitals with a reach across Chicago's western and northern suburbs to northern Illinois.
Cadence operates Central DuPage Hospital and Delnor Hospital while Rockford operates Rockford Memorial Hospital and Van Matre HealthSouth Rehabilitation Hospital, serving an area far northwest of Chicago and southern Wisconsin.
The two systems had said the union would allow them to expand their clinical capabilities. Cadence was formed in 2011 with the merger of Central DuPage in the Chicago suburb of Winfield and Delnor in the far west suburb of Geneva. The Rockford system is the largest system serving the region far northwest of Chicago.
Cadence has about $580 million of debt and revenues of $1.13 billion. Fitch Ratings early this year affirmed Cadence's AA rating which "reflects Cadence's robust liquidity, consistently strong profitability and leading market share position," said Fitch, which rates about $330 million of debt issued by Central DuPage.
Rockford has annual revenues of $416 million and had been seeking a partner for some time. Rockford issued $67 million of refunding debt in 1997 and $61 million in 2008. Its rating of A-plus is based on a liquidity facility from JPMorgan Chase Bank NA.
