SIOUX FALLS, S.D. — Sanford Health's plan to merge with a large, Iowa-based health system has collapsed.
Sanford Health announced plans in June to merge with UnityPoint Health, based in Des Moines, Iowa. The merged organization, with Sanford President and CEO Kelby Krabbenhoft at its head, would have made the combined group a top-15 health system in the nation, with more than $11 billion in combined revenue. It had been expected to close later this year, pending regulatory approval.
Krabbenhoft, in an emailed statement, said the merger had been abruptly called off by UnityPoint after 18 months of work by leaders at both organizations. He described Sanford as “excited at the opportunity” for a merged health system with national prominence.
“We are disappointed that the UnityPoint Health board failed to embrace the vision,” Krabbenhoft said. “Our focus now is on the patients and communities we serve and the 50,000 people working tirelessly to support them.”
A Tuesday press release from UnityPoint said the company has “great respect” for Sanford and the relationships the two systems have developed.
“Over the past several months, UnityPoint Health has seriously explored the opportunity to join together with Sanford Health,” the statement reads. “After significant consideration, we will not be moving forward with a formal partnership.”
The statement didn't otherwise elaborate why UnityPoint was halting the merger, but said the company is "competitively positioned for the future."
In an open letter to patients and staff, UnityPoint CEO Kevin Vermeer echoed the themes of the company's statement on the merger collapse, although he characterized the move as a joint decision. But also added UnityPoint would, with Sanford, "explore opportunities to work together in the future on behalf of the people and communities we each serve."
In June, when Sanford and UnityPoint announced the merger plan, Krabbenhoft described the two as "successful systems intent on controlling our own destiny" and pointed directly at the value of combining two organizations so together they could grow even further.
"We believe that in the very near future, fully integrated health systems will drive greater value through affordable options for high-quality health care to patients, governments and employers."
The merger would have brought together two large, regional health systems with adjoining and complementary footprints, creating a regional health care giant and elevating the combined company into national prominence on sheer size alone.
Sanford, with 48,600 employees, including 1,300 physicians, has 44 medical centers, 482 clinics and 200 senior living facilities. Other than its senior living facilities, with locations across the nation, Sanford's facilities are largely in South Dakota, North Dakota, Minnesota and Iowa.
UnityPoint Health has about 32,000 employees, including about 1,200 physicians, has relationships with 39 hospitals and more than 310 clinics. UnityPoint's facilities are scattered throughout Iowa and include locations in Wisconsin and western Illinois.
The failure to combine with UnityPoint marks a rare merger misstep for Sanford, whose growth has been defined by the philanthropy of chief patron and credit card mogul T. Denny Sanford, and two key mergers: the Fargo-based MeritCare Health System in 2009 and The Evangelical Lutheran Good Samaritan Society national senior care facilities operator earlier this year.