Dallas-based Tenet Healthcare has completed another hospital sale as it continues to look to its ASC arm, United Surgical Partners International, to drive growth.
Tenet sold its 70% ownership stake in five Alabama hospitals on Oct. 1 in a deal valued at approximately $910 million in cash, with after-tax proceeds of approximately $790 million. The transaction covers Birmingham-based Brookwood Baptist Medical Center and Princeton Baptist Medical Center, Citizens Baptist Medical Center in Talladega, Shelby Baptist Medical Center in Alabaster and Walker Baptist Medical Center in Jasper.
Earlier this year, the health system sold nine hospitals in California and South Carolina for a total of $3.9 billion.
But the system's ASC arm keeps growing. USPI acquired 45 new ASCs and quietly purchased ASC chain Covenant Physician Partners in the first quarter. USPI also inked a partnership with the Tampa-based Florida Orthopedic Institute in the second quarter.
"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," CEO Saum Sutaria, MD, said during the company's fourth-quarter 2024 earnings call. "We will have significant financial and capital flexibility to increase shareholder value over the long-term."
Signaling the company has no plans to slow acquisitions, Tenet plans to invest $450 million in USPI and aims to operate between 575 and 600 facilities by the end of 2025.
Tenet is forgoing risky or turnaround hospitals and is instead focusing on buying high-quality assets with good margins, Dr. Sutaria said Sept. 9 during the Wells Fargo Healthcare Conference.
"The value proposition of USPI hasn't changed," he said. "It's only strengthened, and the multiples at which we're acquiring and synergizing haven't changed. … We have developed a disciplined process around diligence and evaluation of deals we're going to do."