DALLAS - Tenet Healthcare Corporation (NYSE:THC) has reached a definitive agreement to sell two of its hospitals in San Luis Obispo County to Adventist Health. The $550 million deal includes Sierra Vista Regional Medical Center, Twin Cities Community Hospital, and associated operations. The after-tax proceeds are expected to be around $450 million.
The hospitals in question reported revenues of $337 million, pre-tax income of $25 million, and Adjusted EBITDA of $38 million for the year ended December 31, 2023. Tenet anticipates recording a pre-tax book gain of approximately $275 million from the sale, which is slated for completion in the spring of 2024, pending regulatory approvals and closing conditions.
In addition to the sale, Tenet's subsidiary Conifer Health Solutions will partner with Adventist Health to provide revenue cycle services. This strategic partnership aims to enhance cash flow performance and patient engagement for Adventist Health, which oversees more than $3.5 billion in net revenue.
Dr. Saum Sutaria, Chairman and CEO of Tenet Healthcare, expressed confidence in Adventist Health's commitment to compassionate care in San Luis Obispo County and anticipates that the partnership will leverage new innovations to optimize the patient experience.
This transaction forms part of Tenet's broader healthcare services, which include a network of 58 acute care and specialty hospitals, over 480 ambulatory surgery centers, and around 160 outpatient facilities, as well as revenue cycle management through Conifer Health Solutions.
The information in this article is based on a press release statement from Tenet Healthcare Corporation.
InvestingPro Insights
As Tenet Healthcare Corporation (NYSE:THC) advances its strategic initiatives with the sale of two hospitals, real-time data and insights from InvestingPro provide a deeper look into the company's financial health and market position. Tenet's management has been actively enhancing shareholder value, evidenced by a perfect Piotroski Score of 9, which signals strong fiscal health and operational efficiency. This is complemented by aggressive share buybacks, as noted in one of the InvestingPro Tips, underscoring management's confidence in the company's intrinsic value.
InvestingPro data highlights Tenet's substantial market presence with an adjusted market capitalization of $8.92 billion. The company's valuation is also notable, with a price-to-earnings (P/E) ratio of 14.88, which is attractive when coupled with near-term earnings growth. Additionally, Tenet's revenue growth over the last twelve months as of Q4 2023 stands at 7.17%, indicating a solid top-line expansion.
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