PHOENIX - MultiCare Health System, a not-for-profit health system based in Tacoma, Wash., has reached a deal to purchase the for-profit Rockwood Health System for $425 million and will finance a large portion of it with bonds.
While many details of the transaction announced Thursday are not yet being disclosed, the transaction includes the 388-bed Deaconess Hospital in Spokane, the 123-bed Valley Hospital in Spokane Valley and the multi-specialty Rockwood Clinic.
MultiCare has annual revenues of $2 billion and is comprised of four acute-care adult hospitals, one acute-care children's hospital and a robust network of community-based primary, specialty and urgent care facilities. When this transaction is completed, MultiCare will become the largest community-based, locally-governed health system in Washington.
Carsten Beith, a managing director at Cain Brothers, which is MultiCare's financial advisor, said the transaction will certainly include a significant bond financing portion.
"The structure of what that looks like is to be determined," Beith said. "The plan of finance has not been concluded yet, but certainly they will be financing a significant portion of it with a new debt issue."
The most recent MultiCare bond issue came in April 2015 when the Washington Health Care Facilities Authority issued $373.4 million of revenue bonds on MultiCare's behalf. The hospital group has just under $1 billion in bond debt according to its annual financial statements filed in 2015.
Cain Brothers said in a statement that purchasing the Rockwood system will allow MultiCare to expand its geographic reach into Eastern Washington, while acquiring an organization with like-minded values. This acquisition is part of MultiCare's growth plan to further its vision of becoming the leading value-based health system in the Pacific Northwest, the FA said.
