The MultiCare Health System plans to buy Rockwood Health System in Spokane, Washington from subsidiaries of Tennessee-based Community Health Systems. Rockwood Health System includes Deaconess and Valley Hospitals, and Rockwood Clinic, a multispecialty physician practice. Financial terms of the pending deal were not disclosed.
Spokane serves as a healthcare service hub for the 1.5 million people in the region comprising eastern Washington, northern Idaho and western Montana.
Rockwood Health System will become part of MultiCare's integrated nonprofit healthcare system, which includes four acute-care adult hospitals, one acute-care children's hospital, and a network of community-based primary, specialty and urgent care facilities.
[Also: Community Health Systems ups number of hospitals to divest to 17, CEO says]
The news comes as struggling CHS has shedded more than a dozen hospitals. Earlier this fall, published reports alleged the company was planning to sell its business, and CHS itself issued a statement saying it was "exploring a variety of options with financial sponsors, as well as other potential alternatives."
In September, Pennsylvania law firm Ryan and Maniskas said that a class-action lawsuit had been filed in U.S. District Court for the Middle District of Tennessee on behalf of those that purchased the common stock of CHS spin-off Quorum Health Corp. -- which owns or leases 38 hospitals across 16 states that are primarily located in rural areas with populations of 50,000 or less -- on behalf of investors, who received the shares in connection with the spin-off.
The complaint alleged that Quorum and certain of its executive officers made false and misleading statements, and failed to disclose to investors that many of Quorum's hospitals were underperforming at the time of the spin-off as well as other "indicators of impairment" that were present at the time. It also alleges Quorum failed to inform investors about the issues, and that as a cumulative result, Quorum's public statements were materially false and misleading.
[Also: Community Health Systems adopts poison pill to prevent takeover]
In October, in an attempt to maintain control over its financial future, CHS threw up a temporary block against anyone acquiring a controlling block of their stock, a move referred to as a "poison pill."
Maurine Cate, CEO of Deaconess Hospital, said in a statement that "aligning the resources and assets of Rockwood Health System with MultiCare will deepen the impact we can have across the region."
[Also: Tracking 2016 mergers and acquisitions]
Bill Robertson, president and CEO of MultiCare Health System, said MultiCare will become the largest community-based, locally-governed health system in the state when the transaction is complete.
The deal is expected to close in the first quarter of 2017.
Twitter: @JELagasse