The Illinois Health Facilities and Services Board last week signed off on two planned hospital system mergers in the Chicago area.
The regulatory agency cleared Oak Brook-based Advocate Health Care's combination with Elgin-based Sherman Health System as well as Naperville-based Edward Hospital & Health Services' union with Elmhurst Memorial Healthcare.
Edward and Elmhurst formalized their merger plans in April. The combined system will generate more than $1 billion in annual revenues and serve the near and far western suburbs. The union allows Edward to extend its reach and Elmhurst to join forces with a higher-rated and more fiscally stable system.
Elmhurst has $495 million of debt rated in the triple-B category and Edward has $278 million rated in the single-A category, all issued through the Illinois Finance Authority.
Advocate and Sherman also finalized their union plans in April. Advocate has expanded its geographic reach steadily through acquisitions over the years. The system operates 10 acute care hospitals. The acquisition of Sherman allows it to extend its reach far northwest of Chicago.
Advocate carries mid double-A level ratings on $1.1 billion of outstanding debt. Its facilities generated $4.65 billion of revenues in fiscal 2011. Sherman has $285 million of outstanding debt rated in the triple-B category. Sherman generated $308 million in revenue last year.