- Dallas-based Tenet Healthcare Corp. is significantly expanding its ambulatory care presence with two separate deals to purchase companies from private equity firm Welsh, Carson, Anderson & Stowe.
- Under the terms of the first deal, Tenet will assume majority control of United Surgical Partners International, an ambulatory surgery center operator also based in Dallas, for $425 million. The company will merge its short-stay surgery and imaging center assets with USPI and will take full ownership of the company within five years.
- In the second deal, worth $215 million in cash, Tenet will purchase Aspen Healthcare, a UK-based operator of four private acute-care hospitals, three ambulatory surgery centers and a cancer center, according to Modern Healthcare.
The first deal fits Tenet's ongoing strategic focus on the outpatient setting and the higher margins it offers. The company told investors in November that it had grown the number of outpatient facilities it operates from 67 in 2009 to around 200 in Q3 of last year.
"This is very consistent with everything we've been saying about our business for several years," CEO Trevor Fetter said.
The partnership with USPI specifically appears well-matched. The surgical center typically forms partnerships with health systems and physician groups, an approach that Fetter says fits with Tenet's strategy of partnering with nonprofit health systems (like Dignity Health and Ascension in AZ).
The Aspen deal is a little more unexpected, although Fetter remarks that the National Health Service has been encouraging private sector investment to help combat rising costs with growth opportunities. This deal is also not Tenet's first foray into the international market, although it will be the company's first overseas portfolio since it sold a hospital in Spain in 2004, according to Modern Healthcare.
Both deals are expected to close in the third quarter. Tenet is also expected to announce a new joint venture with a nonprofit system later Monday.