Sanford Health, known for being the nation’s largest rural health system, has announced plans to grow its footprint even further and establish a presence in Minnesota’s Twin Cities.
The organization said on Friday that it signed a definitive agreement to acquire North Memorial Health, a health system with two hospitals and 22 clinics in the Twin Cities metro region.
Sanford — which has its headquarters in Sioux Falls, South Dakota — operates 58 hospitals and nearly 300 clinics across the upper Midwest, including South Dakota, North Dakota, Minnesota, Wyoming, Iowa, Wisconsin and Michigan’s Upper Peninsula. It also runs a health plan with nearly 415,000 members.
As for its Minnesota presence in particular, Sanford employs nearly 10,000 workers and provides care for about 300,000 patients annually in the state. Currently, this presence is mostly in rural areas across the western third of the state, away from the Twin Cities.
Under the deal, North Memorial will become a subsidiary of Sanford, with its CEO Trevor Sawallish becoming the leader of Sanford’s Twin Cities region.
Sanford said the deal will boost access to specialty care, virtual care and behavioral health services in the Twin Cities. It is pledging a $600 million investment into North Memorial’s facilities, mainly for modernizing the Level 1 trauma center at Robbinsdale Hospital and doubling the size of Maple Grove Hospital, including expanding its maternity, inpatient and surgical capacity.
For North Memorial, the deal is an opportunity to shore up its finances and achieve long-term stability. Financial pressures have forced the health system to close service units and lay off employees in recent years.
“We’ve been open about the financial and regulatory pressures and the rising costs that make it harder to protect access to care on our own. Through a deliberate national search, Sanford stood out as a partner who understands our true value and shares our belief that better — not just bigger — is what matters. This partnership is about staying strong for the long term — so our patients can keep getting the care they need close to home and our teams have the support they deserve,” Sawallish said in a statement.
The deal still requires regulatory approval before it can go through. Minnesota Attorney General Keith Ellison has opened a public comment process on the merger.
This transaction is the latest in a series of M&A plays for Sanford.
Last year, the health system completed its merger with Wisconsin-based Marshfield Clinic Health System, creating a 56-hospital organization spanning seven states. And prior to that deal, there had been a few failed attempts to expand Sanford’s footprint.
One of these attempts was in the Twin Cities. Sanford had originally proposed a merger with Minneapolis-based Fairview Health Services in 2013, and then again in 2022. The planned transaction fell apart the first time due to disagreements over governance and concerns about maintaining local control, and the deal collapsed the second time amid political scrutiny and opposition tied to Fairview’s relationship with the University of Minnesota.
Sanford also announced plans to merge with Intermountain Health in 2020. The deal would have created a 70-hospital system, but it was called off following leadership turmoil at Sanford. The year prior, Sanford also explored a merger with UnityPoint Health, but negotiations ended before a transaction was finalized.
Photo: MirageC, Getty Images
