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Tenet Healthcare 8-K Report, Regulation FD Disclosure (Aug 5, 2024)

Reports
Regulation FD·Other Events·Exhibits & Filings
Filing Date
Filed August 5, 2024
Period End
August 5, 2024
Security
THC
In the record · 2016–202610-K1110-Q338-K176

THC filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 176 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Jan ’19Jan ’19
  2. Deal closed8-K · Dec ’20Dec ’20
  3. Leadership change8-K · Oct ’22Oct ’22
  4. Material agreement8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 8-K filed August 5, 2024. Cited figures are marked; the original filing is the authoritative source.

Tenet Healthcare Corporation (NYSE: THC) announced on August 5, 2024 a definitive agreement to sell its 70%a ownership interest in five Alabama hospitals (Brookwood Baptist Medical Center, Citizens Baptist Medical Center, Walker Baptist Medical Center, Princeton Baptist Medical Center and Shelby Baptist Medical Center) and certain related operations to Orlando Health.

The Divested Facilities are being sold for approximately $910 millionb in cash, with after-tax proceeds of approximately $790 million. The sale is subject to customary purchase price adjustments, is not subject to a financing contingency, and is anticipated to close in the fall of 2024 after regulatory approvals, including the expiration or termination of the Hart-Scott-Rodino waiting period. For the twelve months ended June 30, 2024, the five hospitals and related operations generated pre-tax income of approximately $12 million and Adjusted EBITDA less noncontrolling interest of approximately $60 million, excluding interest expense of approximately $2 million and depreciation and amortization expense of approximately $46 million.

Tenet estimates recording a pre-tax book gain of approximately $375 millionc on the transaction. Conifer Health Solutions, Tenet's revenue cycle subsidiary, will enter a new and expanded ten-year contract to provide revenue cycle management services to the Birmingham hospitals and related operations.

Tenet also reaffirmed its Adjusted EBITDA outlook range for the year ending December 31, 2024, as disclosed in its earnings release dated July 24, 2024. The company stated that Brookwood Baptist Health will remain a joint venture with Baptist Health System, and the press release notes that the information in Item 7.01 and Exhibit 99.1 is furnished rather than filed.

02—Key points

Key Highlights

  1. Sale of 70% interest in five Alabama hospitals and related operations to Orlando Health for approximately $910 million in cash
  2. After-tax proceeds of approximately $790 million from the transaction
  3. Estimated pre-tax book gain of approximately $375 million
  4. Divested facilities generated pre-tax income of approximately $12 million and Adjusted EBITDA less noncontrolling interest of approximately $60 million for the twelve months ended June 30, 2024
  5. Conifer Health Solutions to provide revenue cycle management services under a new and expanded ten-year contract
  6. Transaction not subject to a financing contingency; expected to close in the fall of 2024 subject to regulatory approvals including Hart-Scott-Rodino waiting period expiration
  7. Tenet reaffirmed its FY2024 Adjusted EBITDA outlook range from its July 24, 2024 second quarter earnings release

03—Questions

Frequently Asked Questions

  1. What is Tenet Healthcare selling and to whom?

    Tenet is selling its 70% ownership interest in five hospitals in Alabama and certain related operations to Orlando Health for approximately $910 million in cash, subject to customary purchase price adjustments.

  2. How much cash will Tenet actually receive from the sale?

    The sale price is approximately $910 million in cash, and after-tax proceeds are approximately $790 million.

  3. What financial performance did the divested operations report?

    For the twelve months ended June 30, 2024, the five hospitals and related operations generated pre-tax income of approximately $12 million and Adjusted EBITDA less noncontrolling interest of approximately $60 million, excluding interest expense of approximately $2 million and depreciation and amortization expense of approximately $46 million.

  4. When is the sale expected to close and what could affect it?

    The transaction is anticipated to close in the fall of 2024. Completion is subject to closing conditions, including regulatory or governmental filings and approvals and expiration or termination of the Hart-Scott-Rodino waiting period. The transaction is not subject to a financing contingency.

  5. Does the sale affect Tenet's Conifer business or its 2024 guidance?

    Conifer Health Solutions will enter a new and expanded ten-year contract to provide revenue cycle management services for the Birmingham hospitals and related operations. Tenet also reaffirmed its latest FY2024 Adjusted EBITDA outlook range.

04—Continue

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