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Sanford Health eyes expansion into Chicago market

Five years after Sioux Falls, S.D.-based Sanford Health failed to acquire Minneapolis-based Fairview Health Services, the 45-hospital system is looking to expand outside of state lines for the second time and eyeing potential opportunities in Chicago, according to the Argus Leader.

While announcing the health system's intent to merge with the Evangelical Lutheran Good Samaritan Society, Sanford Health President and CEO Kelby K. Krabbenhoft revealed the organization is in talks with an undisclosed Chicago-based organization, the report states.

Mr. Krabbenhoft did not mention specifics of the negotiations, but said the health system's board authorized him last week to pursue discussions in Chicago.

"The board authorized me last week to pursue discussions in Chicago, Ill., and a board vote down there is happening tonight," Mr. Krabbenhoft said during the Good Samaritan merger announcement, according to the Argus Leader. "My first phone call after the board authorized me to go forward with that agreement was to call Dave and say, 'OK, what's Illinois like for long-term care? Is there an opportunity in the greater Chicago region for the Good Samaritan Society and Sanford to explore long-term care facilities?'"

Sanford declined to provide the Argus Leader with additional details regarding potential merger and acquisition activity in Chicago, stating via email: "Sanford Health continues to explore growth opportunities locally, regionally and nationally. We are in discussions with various entities, including one in Chicago. Both of our respective boards have expressed interest in continuing these discussions."

The Chicagoland area has been ripe with hospital M&A activity in recent years. Last March, Downers Grove, Ill.-based Advocate Health Care and Evanston, Ill.-based NorthShore University HealthSystem abandoned their plan to merge. However, Advocate Health Care found success its attempt to merge with Aurora Health Care, a 15-hospital system based in Milwaukee, and completed the merger in April.

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