DALLAS - Tenet Healthcare Corporation (NYSE:THC), a diversified healthcare services company, has agreed to divest its 70% stake in Brookwood Baptist Health and its associated operations in Birmingham to Orlando Health. The cash deal, valued at approximately $910 million, is expected to yield after-tax proceeds of around $790 million for Tenet.
The sale encompasses five hospitals, including Brookwood Baptist Medical Center and four others, along with affiliated physician practices. The transaction also involves a new ten-year contract for Tenet’s subsidiary, Conifer Health Solutions, to provide revenue cycle management services to these Birmingham facilities.
Tenet's CEO, Saum Sutaria, expressed gratitude towards Baptist Health System for their collaborative efforts in enhancing care at Brookwood Baptist Health.
He also noted that Orlando Health's integration of these hospitals would benefit the greater Birmingham communities, given Orlando Health’s long-standing commitment to improving community health.
For the twelve months ending June 30, 2024, Tenet's equity interest in the Brookwood Baptist Health joint venture reported pre-tax income of approximately $12 million and an Adjusted EBITDA of roughly $60 million. The anticipated transaction is also expected to result in a pre-tax book gain of about $375 million for Tenet.
The completion of the sale is slated for fall 2024, pending customary regulatory approvals and closing conditions. Meanwhile, Tenet has reaffirmed its FY24 Adjusted EBITDA Outlook as per its second quarter 2024 earnings release.
This strategic move comes as part of Tenet's ongoing business operations, which include the largest ambulatory platform in the country through United Surgical Partners International, a collection of acute care and specialty hospitals, outpatient facilities, and a global business center in Manila, Philippines. Conifer Health Solutions, a Tenet subsidiary, continues to offer revenue cycle management and value-based care services.
The information in this article is based on a press release statement from Tenet Healthcare Corporation.
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