Oak Brook, Ill.-based Advocate Health Care has made a nonbinding pledge to invest $200 million over five years into Elgin, Ill.-based Sherman Health, which signed a letter of intent to merge with Advocate in October 2012, according to a report by Crain's Chicago Business.
The Illinois Health Facilities and Services Review Board released the letter of intent to the public, which outlined Sherman's plan to refinance its debt with Advocate's strong balance sheet. Advocate, the state's largest health network with 11 facilities and $4.6 billion in revenue last year, beat out Winfield, Ill.-based Cadence Health for Sherman's merger agreement, which has yet to be finalized, according to the report.
Advocate's investment would include $60 million to routine capital replacement, and the other $140 million could be used to acquire physicians' groups, expand service lines and cover other capital and operating expenses. In addition, Advocate would agree to no layoffs at Sherman for six months.
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The Illinois Health Facilities and Services Review Board released the letter of intent to the public, which outlined Sherman's plan to refinance its debt with Advocate's strong balance sheet. Advocate, the state's largest health network with 11 facilities and $4.6 billion in revenue last year, beat out Winfield, Ill.-based Cadence Health for Sherman's merger agreement, which has yet to be finalized, according to the report.
Advocate's investment would include $60 million to routine capital replacement, and the other $140 million could be used to acquire physicians' groups, expand service lines and cover other capital and operating expenses. In addition, Advocate would agree to no layoffs at Sherman for six months.
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