Chicago-based Northwestern Memorial HealthCare will pay approximately $350 million to acquire Northwestern Medical Faculty Foundation, a 900-physician practice affiliated with the health system's namesake university, according to a Crain's Chicago report.
The price tag breaks down to $230.5 million upfront, plus annual payments totaling at least $118.5 million through 2016. Those figures mean this deal is likely one of the highest prices ever paid for a physician practice, according to Crain's.
"You normally don't see nine-figure transactions involving physician practices," Adam Lynch, vice president and Chicago-based Principle Valuation, said in the report. But NMFF was the second-largest physician group in the Chicago area before the deal, and it is also specialist-heavy, making this type of price a rarity in hospital-physician transactions.
NMFF physicians provide most of the care at the health system's two hospitals, 894-bed Northwestern Memorial Hospital in Chicago and 201-bed Northwestern Lake Forest (Ill.).
Northwestern Memorial Physicians Group, the health system's affiliated group, had 122 physicians prior to this new relationship.
Northwestern Memorial and NMFF signed a letter of intent to integrate in March, and the physician group voted to join the health system in July. The physicians will now operate under the name Northwestern Medical Group, which will include more than 1,000 physicians and other medical specialists.
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