CHICAGO — Novi, Mich.-based Trinity Health has closed its acquisition of Chicago's Loyola University Health System in a deal that totals more than $1 billion.
The acquisition marks the latest hospital merger in the Chicago area. Also Tuesday, Provena Health and Resurrection Health Care announced it had reached a merger agreement to create what will be Illinois' largest Catholic health care network. That deal still needs Illinois approval.
The new network will have 12 hospitals across the state and nearly $3 billion of revenue`.
Other pending mergers include Ascension Health, the nation's largest nonprofit health care provider, and suburban Chicago Alexian Brothers. Central DuPage Health is joining with Delnor Health.
The two-hospital Loyola health care system — rated Baa3 with a positive outlook — is a separate nonprofit with the university as its sole corporate member. Trinity, which is rated in the mid-double-A range by all three major rating agencies, now replaces the university as the sole corporate member.
The health system and the provider will retain all its liabilities, including responsibility for repaying its debt. The university will continue to operate the Stritch School of Medicine.
Trinity will pay Loyola $100 million and has also committed to providing $22.5 million in yearly support to the medical school.
Trinity Health also will cover half of the $150 million price tag for a new medical research facility that will be built in Maywood, Ill., outside Chicago, where the Loyola University Medical Center is located.
As part of the deal Trinity will take over Loyola's debt, which is reported to total $780 million including $350 million of bonds.
The Loyola health system also operates a hospital in suburban Melrose Park and 28 primary and specialty care facilities in the Chicago area. It had revenues of $1 billion in 2010.
The acquisition is expected to have a positive impact on Loyola University Chicago. Moody's Investors Service in April put the school's A3 rating on watchlist for a possible upgrade ahead of the final sale.
Trinity operates 46 hospitals in nine states. The system has more than $7.1 billion in revenues annually and more than $3 billion in cash and assets.
Its debt totals $2.7 billion and the system is in the midst of a $2.4 billion capital campaign.