UPDATE: April 1, 2024: Adventist Health closed its acquisition of two Tenet Healthcare hospitals on the central California coast on Friday. The deal includes related physician practices and imaging centers.
Eleze Armstrong, who most recently was CEO of Twin Cities Community Hospital, will take on the interim CEO role at both hospitals.
The facilities will now operate as Adventist Health Twin Cities and Adventist Health Sierra Vista. Tenet will net about $450 million in after-tax proceeds, the for-profit said in February.
Dive Brief:
- Tenet Healthcare announced on Thursday it entered into a definitive agreement to sell two hospitals on the central California coast to nonprofit Adventist Health for about $550 million.
- In addition to the deal, which is expected to close in the spring, Tenet subsidiary Conifer Health Solutions will provide revenue cycle management services to Roseville, California-based Adventist.
- Tenet has been offloading hospitals while the for-profit operator works to cut down its debt load and focus on its ambulatory surgery business.
Dive Insight:
Tenet estimates it will record a pre-tax book gain of approximately $275 million from the sale of Sierra Vista Regional Medical Center and Twin Cities Community Hospital.
The deal comes on the heels of other recent Tenet divestitures. Earlier this month, the for-profit announced it had agreed to sell four hospitals in Southern California to UCI Health for about $975 million. It also closed a $2.4 billion sale of three hospitals in South Carolina to Novant Health in the same month.
It also attempted to offload its majority ownership in San Ramon Regional Medical Center to Walnut Creek, California-based John Muir Health, but the deal collapsed in December following a lawsuit from the Federal Trade Commission. The regulator had argued the sale would eliminate competition between lower-cost San Ramon and John Muir in the region.
The divestitures have improved Tenet’s leverage position, executives said on a fourth-quarter earnings call earlier this month. The for-profit beat Wall Street expectations on revenue, posting operating revenue of $5.4 billion and a net income of $244 million.
On the call, CEO Saum Sutaria noted that Tenet aims to grow its ambulatory surgery unit United Surgical Partners International. The segment operates or has ownership interests in more than 480 ambulatory surgery centers and surgical hospitals.
