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Evanston Northwestern Healthcare Corporation (ENH) has entered into an agreement to acquire Rush North Shore Medical Center, a 265-bed hospital located at 9600 Gross Point Road in Skokie. ENH currently owns and operates hospitals in Evanston, Glenview and Highland Park.

On May 13 ENH filed a letter of intent with the Illinois Health Facilities Planning Board in which it stated it intended to ask the Board to allow the change of ownership. In its filing, ENH said the purchase price is estimated at $85 million for the property, plant and equipment. In addition, ENH said it will make a $10 million contribution to the Rush North Shore Foundation, which will operate as a separate charitable foundation to support health and wellness in Skokie and surrounding communities.

Under the Planning Board’s rules, ENH is required to file the letter of intent at least 30 days before filing a formal application to allow the change of ownership. Once the application is deemed complete, members of the public may request a public hearing on the application. If a public hearing is requested, ENH must prepare a summary stating the anticipated benefits of the proposed change of ownership to the community and the anticipated cost savings, if any, for the community.

Because the transaction is for more than $63 million, ENH must also obtain pre-merger clearance from the Federal Trade Commission (FTC) or the Department of Justice to proceed with the acquisition, Mitch Katz, an FTC senior public affairs specialist, told the RoundTable. Mr. Katz said ENH would be required to submit a pre-merger package summarizing the transaction and the likely impact on competition.

This will be the second hospital acquisition by ENH in the last eight years. In 2000 ENH acquired Highland Park Hospital. In 2007, the FTC affirmed a decision by an administrative law judge that concluded ENH’s acquisition of Highland Park Hospital was anticompetitive and violated the antitrust laws. On April 28 the FTC entered a final order specifying a detailed remedy intended to restore competition lost as a result of that acquisition. Among other things, the order requires Evanston and Highland Park hospitals to establish separate negotiating teams to negotiate contracts with managed care organizations, with the intent of re-injecting competition between the hospitals for the business of the managed care organizations. The FTC did not order ENH to divest Highland Park Hospital.

In its filing with the Planning Board, ENH said it expects to effectuate the deal in October if necessary regulatory approvals are obtained. Jim Anthony, ENH director of public relations, told the RoundTable ENH would not provide additional comment on the acquisition.