Dallas-based Tenet Healthcare, parent company of ASC giant United Surgical Partners International, has agreed to sell its majority interest in Birmingham, Ala.-based Brookwood Baptist Health to Orlando (Fla.) Health.
Here are five things to know:
1. The deal is valued at approximately $910 million in cash, with after-tax proceeds of approximately $790 million.
2. The transaction includes five hospitals, along with affiliated physician practices — Brookwood Baptist Medical Center in Birmingham; Princeton Baptist Medical Center in Birmingham; Walker Baptist Medical Center in Jasper, Ala.; Shelby Baptist Medical Center in Alabaster, Ala.; and Citizens Baptist Medical Center in Talladega, Ala.
3. Under the proposed deal, which is expected to close in fall 2024, Tenet's revenue cycle management arm will enter into a 10-year contract to provide services for the Alabama hospitals.
4. Tenet has been on a hospital selling spree in 2024. The company has sold two hospitals to Roseville, Calif.-based Adventist Health for $550 million and three hospitals in South Carolina to Winston-Salem, N.C.-based Novant Health for $2.4 billion, as well as entered into a $995 million deal with Orange, Calif.-based UCI Health to bring four hospitals and an ASC into the UCI Health network.
5. The strategy aligns with Tenet's focus on USPI to spur growth. In 2023, the company added 30 ASCs to its portfolio and has a de novo development pipeline of more than 30 centers.
"Tenet is entering a new era with a greater proportion of our performance coming from our highly efficient ambulatory surgical business and a reduced debt profile; we are well positioned to continue to expand free cash flow further over time," CEO Saum Sutaria, MD, said in a Feb. 8 earnings call. "We will have significant financial and capital flexibility to increase shareholder value over the long term."