Tenet announces sale of seven hospitals in South Carolina and California
Novant Health bought three for $2.4B and UCI Health has agreed to pay $975M for four.
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Tenet Healthcare Corporation announced yesterday that it has completed the sale of three of its hospitals in South Carolina to Novant Health for approximately $2.4 billion.
It has also entered into a definitive agreement with UCI Health for the sale of four Tenet hospitals and related operations in Orange County and Los Angeles County, California for approximately $975 million in cash.
These transactions will also support Tenet's objective of reducing leverage, the company said.
WHY THIS MATTERS
Tenet completed the sale of its three South Carolina hospitals and related operations to Novant for approximately $2.4 billion in cash (after-tax proceeds of approximately $1.750 billion).
The hospitals include Coastal Carolina Hospital, Hilton Head Hospital, East Cooper Medical Center, affiliated physician practices and other related hospital operations. Tenet's Conifer Health Solutions subsidiary has entered an expanded 15-year contract to provide comprehensive revenue cycle management services for these operations.
Additionally, Tenet has entered into a definitive agreement with UCI Health for the sale of four Tenet hospitals and related operations in Orange County and Los Angeles County. The agreement – which follows the approval of the University of California Board of Regents – is for approximately $975 million (after-tax proceeds of approximately $800 million).
The sale will include Fountain Valley Regional Hospital, Lakewood Regional Medical Center, Los Alamitos Medical, Placentia-Linda Hospital and other related operations. Tenet said it would retain net working capital related to pre-closing operations. Conifer Health Solutions will continue to provide revenue cycle management services through the transition.
The transaction is expected to be completed in the spring of 2024.
THE LARGER TREND
Tenet estimates that as a result of the pretax book gains from these two transactions, the company's income tax expense would be favorably impacted in 2024 by approximately $190 million due to a reduction in interest expense limitations.
In addition, Tenet announced that it expects to exceed the high end of its latest FY23 Adjusted EBITDA Outlook range. The results are driven, among other factors, by strong surgical growth at United Surgical Partners International.
Tenet, headquartered in Dallas, operates 58 acute care and specialty hospitals.
It is expected to announce Q4 and full-year earnings results on February 8.
Email the writer: SMorse@himss.org
