Tenet's sell-off spree continues 

Tenet Healthcare, parent company of ASC chain United Surgical Partners International, has inked another deal to sell two hospitals to Roseville, Calif.-based Adventist Health for $550 million. 

This is the third such deal Tenet has inked this year. In February, Tenet finalized the sale of three hospitals in South Carolina to Winston-Salem, N.C.-based Novant Health for $2.4 billion. 

Tenet's Pacific Coast Network, meanwhile, entered into a $995 million deal with Orange, Calif.-based UCI Health, bringing four hospitals and an ASC into the UCI Health network. 

In a Feb. 8 earnings call transcribed by Seeking Alpha, CEO Saum Sutaria, MD, noted that "the sales were completed at very attractive [earnings before interest, taxes, depreciation and amortization] multiples, evidencing the strength of our assets and the quality of care they provide in their communities. Collectively, these transactions will substantially improve our leverage position."

The company's stock is seeing momentum due to the sell-offs, according to a Feb. 4 article published by Seeking Alpha. Last year, Tenet posted a 1.6% decline in full-year sales to $19.2 billion, and these new deals will bring billions of dollars in sales to the company.

The strategy aligns with Tenet's focus on USPI to spur growth. In 2023, the company added 30 ASCs to its portfolio and has a de novo development pipeline of more than 30 centers.

"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; we are well positioned to continue to expand free cash flow further over time," Dr. Sutaria said on the earnings call. "We will have significant financial and capital flexibility to increase shareholder value over the long term."

Dr. Sutaria added that Tenet is "very confident in the long-term growth rates of this business" and USPI has "consistently acquired centers at attractive valuations and achieved post synergy multiples to below five times while improving our quality and delivering a 96.6% overall patient experience score under our management."

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