Tenet Healthcare Corporation today confirmed it is in "preliminary discussions" with Healthscope about acquiring the second-largest private hospital company in Australia.
Dallas-based Tenet said in a media release that it usually does not comment on speculation on possible acquisitions, but did so this time because of the recent volatility on Tenet stock.
Healthscope owns and operates 43 hospitals representing approximately 15% of Australia's private hospital market, and also operates the country's third-largest pathology business. Healthscope had an EBITDA margin of approximately 13.8% in 2009, and 11.1% revenue growth, Tenet said.
More than 40% of Australians, who have universal access to healthcare, are covered by private health insurance and private hospital expenditures are expected to realize a mid single-digit real-rate of growth for the foreseeable future. Australia's private hospitals complement government-run hospitals and generally serve patients who have purchased private insurance or pay for their hospital care directly, while public hospitals provide emergency care and treatment for patients without private insurance coverage.
Tenet said the acquisition would improve Tenet's payer mix and enhance Tenet's margins and growth rates, advance Tenet's position as a global hospital operator, and provide opportunities for cross-border sharing of knowledge and capabilities.