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John R. Fischer, Senior Reporter | April 03, 2024
Twin Cities Community Hospital (Photo courtesy of Adventist Health)
Tenet Healthcare, one of the largest healthcare providers in the U.S., has completed the sale of six California hospitals through two separate transactions with UCI Health and Adventist Health for a combined sum of over 1.5 billion.
The company transferred ownership of Fountain Valley Regional Hospital and Placentia-Linda Hospital in Orange County, and Los Alamitos Medical Center and Lakewood Regional Medical Center in Los Angeles County to UCI Health on March 26 for $975 million. It then did the same with Adventist on March 29, giving it Sierra Vista Regional Medical Center and Twin Cities Community Hospital in San Luis Obispo for approximately $550 million.
Additionally, its subsidiary Conifer Health Solutions has inked an agreement to provide revenue cycle management services to Adventist.
“I am grateful for the opportunity to expand our mission to the Central California Coast. We are committed to providing access to the full continuum of care that our patients deserve and is absolutely essential to the community,” said Kerry Heinrich, president and CEO of Adventist Health, in a statement.
For the sale to UCI Health, which was
announced in early February, Tenet estimated that after-tax proceeds would be approximately $800 million and will retain net working capital related to pre-closing operations. Together, the four hospitals and their related operations earned approximately $1 billion combined, as well as pretax income of approximately $29 million.
The Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is approximately $71 million, excluding an interest expense of approximately $3 million and a depreciation and amortization cost of approximately $39 million. Tenet estimates that it will have a pretax book gain of approximately $500 million.
The two facilities going to Adventist generated revenues of approximately $337 million, pretax income of approximately $25 million, and an Adjusted EBITDA of approximately $38 million for the year ending December 2023, excluding depreciation and amortization expense of approximately $13 million. The agreement was
announced in late February.
