Spectrum Health, based in Grand Rapids, and Beaumont Health, based in Southfield, are exploring what will be the third major merger attempt for Beaumont in 2 years. The LOI was signed on Thursday, June 17, however, terms of the deal were not disclosed.
If this merger is successful, the new health care system birthed out of would be Michigan’s largest employer and create an entirely new system that includes 22 hospitals and 305 outpatient locations, and employs 64,000 employees and 7,500 independent physicians.
Between the two organizations, Spectrum is just over twice as large when it comes to revenue, with Beaumont reporting $4 billion in 2020 and Spectrum $8.3 billion.
The merger would free up capital for both organizations and restructure debt. Tina Freese Decker, president and CEO of Spectrum, would then lead the helm.
Once the merger is complete, the new company would be run by a 16-member board of directors that includes at least three physicians, the president and CEO, plus seven representatives each from Spectrum Health and Beaumont.
At Cascade Partners we are active in healthcare transactions on a routine basis. Our founder, Raj Kothari, called this merger “Pretty transformational news benefiting Southeast Michigan healthcare consumers. This combination will create a market participant with real scale and resources, such as Priority Health, that will have an incredible impact on the quality and affordability of healthcare in Michigan.”
One major benefit of the merger would be the ability of providers to work hand in hand with Priority Health to enhance the quality and cost of care patients across the region.
While it has yet to be finalized, the excitement behind the merger and what it could mean to healthcare providers and consumers in Southeast Michigan is a testament to the growth we’re seeing in healthcare mergers and acquisitions.