Tenet Completes Sale of Five Hospitals in Birmingham

Rhea-AI Summary

Tenet Healthcare (NYSE: THC) has completed the sale of its 70% majority ownership interest in Brookwood Baptist Health in Birmingham to Orlando Health. The transaction includes five hospitals: Brookwood Baptist Medical Center, Citizens Baptist Medical Center, Princeton Baptist Medical Center, Shelby Baptist Medical Center, and Walker Baptist Medical Center, along with other related operations.

As part of the deal, Tenet's subsidiary, Conifer Health Solutions, has entered into a ten-year contract to provide comprehensive revenue cycle management services for these operations. This sale aligns with previously disclosed terms and marks a significant change in Tenet's portfolio in the Birmingham area.

Positive

• Completion of the sale of 70% majority ownership in Brookwood Baptist Health
• Ten-year contract for Conifer Health Solutions to provide revenue cycle management services

Negative

• Divestiture of five hospitals and related operations in Birmingham

Insights

Financial Analyst

The sale of Tenet Healthcare's majority stake in Brookwood Baptist Health marks a significant strategic move. This divestiture of five hospitals in Birmingham aligns with Tenet's ongoing portfolio optimization efforts. While the specific financial terms weren't disclosed, such transactions typically generate substantial cash proceeds, potentially strengthening Tenet's balance sheet and providing capital for core operations or debt reduction.

The 10-year revenue cycle management contract secured by Conifer Health Solutions is a notable positive. This long-term agreement ensures a steady revenue stream and maintains Tenet's connection to these assets, partially offsetting the loss of direct ownership income. For investors, this deal represents a streamlining of Tenet's hospital portfolio while retaining a valuable service contract, potentially improving operational efficiency and financial flexibility in the long run.

Healthcare Industry Analyst

This transaction reflects the ongoing trend of healthcare system consolidation and strategic realignment in the U.S. Orlando Health's acquisition of these Birmingham assets signifies their expansion into a new market, potentially creating economies of scale and enhancing their competitive position in the Southeast.

For Tenet, divesting these non-core assets allows for a more focused approach on priority markets and service lines. The retention of revenue cycle management services through Conifer demonstrates Tenet's commitment to diversifying revenue streams beyond direct hospital ownership. This hybrid model of asset-light growth coupled with high-margin services could prove attractive to investors seeking exposure to healthcare without the full capital intensity of hospital operations.

The impact on local healthcare delivery in Birmingham will be worth monitoring, as ownership transitions can influence service offerings, pricing and community engagement.

DALLAS--(BUSINESS WIRE)-- Tenet Healthcare Corporation (NYSE: THC) today announced that it has completed the sale of its 70% majority ownership interest in Brookwood Baptist Health in Birmingham to Orlando Health consistent with previously disclosed terms.

The completed transaction includes five hospitals – Brookwood Baptist Medical Center, Citizens Baptist Medical Center, Princeton Baptist Medical Center, Shelby Baptist Medical Center, Walker Baptist Medical Center – and other related operations.

Tenet’s Conifer Health Solutions subsidiary has entered into a ten-year contract to provide comprehensive revenue cycle management services for these operations.

About Tenet Healthcare

Tenet Healthcare Corporation (NYSE: THC) is a diversified healthcare services company headquartered in Dallas. Our care delivery network includes United Surgical Partners International, the largest ambulatory platform in the country, which operates ambulatory surgery centers and surgical hospitals. We also operate a national portfolio of acute care and specialty hospitals, other outpatient facilities, a network of leading employed physicians and a global business center in Manila, Philippines. Our Conifer Health Solutions subsidiary provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers, and other clients. Across the Tenet enterprise, we are united by our mission to deliver quality, compassionate care in the communities we serve. For more information, please visit www.tenethealth.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241001189407/en/

Investor Contact

Will McDowell

469-893-2387

William.McDowell@tenethealth.com

Media Contact

Robert Dyer

469-893-2640

mediarelations@tenethealth.com

Source: Tenet Healthcare Corporation

FAQ

What hospitals did Tenet Healthcare (THC) sell in Birmingham?

Tenet Healthcare sold five hospitals in Birmingham: Brookwood Baptist Medical Center, Citizens Baptist Medical Center, Princeton Baptist Medical Center, Shelby Baptist Medical Center, and Walker Baptist Medical Center.

Who purchased Tenet Healthcare's (THC) majority stake in Brookwood Baptist Health?

Orlando Health purchased Tenet Healthcare's 70% majority ownership interest in Brookwood Baptist Health in Birmingham.

What services will Conifer Health Solutions provide after Tenet's (THC) hospital sale?

Conifer Health Solutions, a Tenet subsidiary, will provide comprehensive revenue cycle management services for the sold operations under a ten-year contract.

How much of Brookwood Baptist Health did Tenet Healthcare (THC) sell?

Tenet Healthcare sold its 70% majority ownership interest in Brookwood Baptist Health.