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Tenet Sells Two Tennessee Hospitals to Methodist Le Bonheur

Analysis  |  By John Commins  
   December 16, 2019

SEC filing shows the for-profit health system sold the hospitals for $350 million.

Investor-owned Tenet Healthcare Corp. is selling its two remaining acute care hospitals in Tennessee to Memphis-based non-profit Methodist Le Bonheur Healthcare, the two health systems announced.

The deal includes the 519-bed Saint Francis Hospital – Memphis, the 196-bed Saint Francis Hospital – Bartlett, six MedPost urgent care centers, and physician practices affiliated with the two hospitals, the health systems said.

Tenet’s Conifer Health Solutions subsidiary will continue to provide revenue cycle management services to the hospitals after the sale is finalized.

The deal is expected to be completed in 2020 after clearing regulatory review.

Financial terms were not disclosed. However, the Memphis Commercial Appeal, citing an Securities & Exchange Commission filing by Tenet, said the sale price was $350 million.

"Consistent with our mission, the addition of Saint Francis hospitals will increase access to high quality healthcare, expand services and enhance the delivery of care to improve the overall health of the communities we serve," said Michael Ugwueke, President and CEO of Methodist Le Bonheur, which currently operates six hospitals in West Tennessee.

Ugwueke says the acquisitions mesh with Methodist Le Bonheur's broader plans by providing improved access to primary, specialty, and charity care, increased investment in medical technology, and by developing improved strategies population health outcomes.  

"We look forward to creating a more dynamic team of physicians, nurses and staff dedicated to delivering compassionate high-quality care to anyone who walks through our doors, regardless of their ability to pay," Ugwueke said.  

With the sale, Dallas-based Tenet's footprint in Tennessee will shrink to include one surgical specialty hospital in Nashville, and more than two dozen surgical centers, urgent care centers, and other outpatient care venues across the state.

In the third quarter of 2019, Tenet reported that it doubled its adjusted net income to $61 million, but saw its net loss reach $233 million. 

The company reported an adjusted EBITDA of $631 million, up 9.4% year-over-year, while its net operating revenues from the hospital operations segment increased 2.3%. 

Tenet also completed a $4.2 billion debt refinancing, increasing its borrowing capacity by $1.5 billion.

“Consistent with our mission, the addition of Saint Francis hospitals will increase access to high quality healthcare, expand services and enhance the delivery of care to improve the overall health of the communities we serve.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

The deal includes Saint Francis Hospital – Memphis, Saint Francis Hospital – Bartlett, six MedPost urgent care centers, and affiliated physician practices.

Tenet's Tennessee footprint will shrink to include one surgical specialty hospital in Nashville, and more than two dozen outpatient care venues.

Tenet’s Conifer Health Solutions subsidiary will provide revenue cycle management to the hospitals after the sale is finalized.


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