Brookwood Baptist Medical Center is one of five hospitals involved in the deal
Tenet Healthcare has announced a definitive agreement to sell its 70% majority ownership interest in Brookwood Baptist Health in Birmingham to Orlando Health for approximately $910 million in cash, with after-tax proceeds expected to be around $790 million.
The sale includes five hospitals: Brookwood Baptist Medical Center, Princeton Baptist Medical Center, Walker Baptist Medical Center, Shelby Baptist Medical Center, and Citizens Baptist Medical Center, as well as affiliated physician practices and related operations. Brookwood Baptist Health will continue as a joint venture with Baptist Health System.
As part of the agreement, Tenet’s Conifer Health Solutions subsidiary will enter a new and expanded ten-year contract to provide revenue cycle management services for the Birmingham hospitals and related operations.
“We are grateful for the partnership with Baptist Health System, which has enabled us to collectively enhance the high-quality, compassionate care that Brookwood Baptist Health offers,” said Dr. Saum Sutaria, chairman and CEO of Tenet Healthcare. “Orlando Health is an esteemed, high-performing healthcare organization with an over-century-long commitment to improving the health and wellness of the communities they serve. Integration of these hospitals into their network will advance healthcare for the greater Birmingham communities.”
For the twelve months ending June 30, 2024, Tenet’s equity interest in the Brookwood Baptist Health joint venture generated pre-tax income of about $12 million and an adjusted EBITDA less non-controlling interest of approximately $60 million, excluding interest expense of about $2 million and depreciation and amortization expense of approximately $46 million. Tenet expects to record a pre-tax book gain of about $375 million from this transaction.
The deal is expected to close in the fall of 2024, pending regulatory approvals and other customary closing conditions.
