OSF HealthCare in exclusive merger talks with Dixon-based KSB Hospital

Proposed deal includes $40M investment in the Dixon hospital

By Kevin Haas
Rock River Current
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ROCKFORD — OSF HealthCare and Dixon-based Katherine Shaw Bethea Hospital (KSB Hospital) said today they have entered exclusive negotiations to finalize a merger.

A term sheet has been signed, and the two health care organizations will spend the next several months finalizing the agreement and seeking regulatory approval.

“As health care continues to evolve, we are responsible for ensuring that we are planning for the future. The challenge of being a standalone, rural hospital in today’s financial environment, was an important element in our board’s consideration,” David Schreiner, president and CEO of KSB Hospital, said in a news release. “OSF HealthCare shares our deep commitment to caring for the health of rural communities and has demonstrated innovative ways to transform health care for the benefit of all people they serve.”

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KSB said it spent months considering its options before selecting OSF HealthCare as its partner. The merger deal includes $40 million in funding to support facility renovations, improve access to care locally and create referrals to subspecialties, the organization said in its release. Education, including the residency programs at KSB Hospital, is also a key component of the agreement.

“Both KSB and OSF have long histories of serving the health and wellness needs of their communities,” Robert Sehring, CEO of OSF HealthCare, said in a news release. “Together, we will ensure continued quality and compassionate health care for the Dixon community and greater Sauk Valley region.”

KSB is a nonprofit health care provider that employs about 900, including 91 practitioners providing specialty care at six locations in Lee and Ogle counties.

“We appreciate that the process of selecting a new partner has created some degree of uncertainty for the employees of KSB and hope that they now feel reassured that the hospital will continue to serve the patients of the Sauk Valley communities well into the future,” Sehring said in the news release.

OSF HealthCare was founded by The Sisters of the Third Order of St. Francis and is headquartered in Peoria. It has 16 hospitals, including OSF Saint Anthony Medical Center in Rockford, and employs nearly 24,000 across 150 locations in Illinois and Michigan.

The two organizations said they will share additional information about the merger as more details are finalized and they prepare to present the deal to state regulatory groups.

This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on X at @KevinMHaas or Instagram @thekevinhaas and Threads @thekevinhaas