Tenet to Acquire Vanguard in Surprise $4.3B Deal
Fetter, in an interview Monday with CNBC, called Detroit "an interesting market obviously."
"It is a three-way tie for No. 1 in market area and Vanguard is very well positioned in Detroit. They have high-quality assets with a great reputation. I think post the transaction revenues from Detroit will only be about 11% of Tenet's combined revenues, so we see big opportunities there," he said.
"They have made very substantial investments that in the market that have yet to generate earnings, hospitals under construction and expansion there. We're looking forward to being state of Michigan and operators in Detroit."
When the deal closes, Charlie Martin, Vanguard's founder, chairman and CEO, will join Tenet's board of directors, and Keith Pitts, Vanguard's vice chairman, will serve Tenet as vice chairman. Martin has a 4.1% stake in Vanguard, which was founded in 1997. "We see the opportunity to recruit and retain Vanguard's operational and corporate talent as a real plus in this acquisition and we will maintain a presence in Nashville," Fetter said in the conference call.
Joe Lupica, chairman Denver-based Newpoint Healthcare Advisors, says the roles at Tenet for Martin and Pitts will not be mere sinecure.
"Charlie is nobody's prop. Charlie is one of the most feverishly brilliant thinkers in the business," Lupica says. "Keith is a brilliant operator and relationship builder with communities. That is important in this industry. If you are coming to town and you are a bad apple, you are going to have a hard time convincing the community to entrust their hospital to you. The question is, are they going to stay."
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