IPC Healthcare has agreed to be acquired by Team Health Holdings Inc. for $1.6 billion in cash, both companies announced Tuesday.

IPC, a North Hollywood company that provides doctors to hospitals and nursing homes, will become part of Team Health, a company in Knoxville, Tenn. that also supplies doctors to hospitals. The combined company will have 15,000 doctors and nurses, and management expects to save $60 million in costs within three years.

IPC stockholders will receive $80.25 a share, a 37 percent premium over the closing price on Monday. The boards of both companies have approved the transaction. It is expected to close by the end of the year.

“This agreement provides an immediate cash premium to our shareholders, and we look forward to partnering with TeamHealth to advance our mission of delivering high-quality inpatient care,” IPC Chief Executive Dr. Adam Singer said in a statement.

IPC shares closed up $20.79 or 36 percent to $79.25 on the Nasdaq.