- Tenet Healthcare (NYSE:THC) plans to acquire a portfolio of up to 45 ambulatory surgery centers from SurgCenter Development (SCD) which will be operated by the former's United Surgical Partners International (USPI) subsidiary as part of its industry-leading ambulatory surgery platform.
- SCD is a developer of physician-owned ASCs with a history of establishing high-quality centers in partnership with physicians with demonstrated leadership in musculoskeletal surgeries.
- Under transaction terms, the company will purchase majority interests (60%) in up to 45 centers fully acquiring SCD's interests, and partially acquiring interests from physician partners, for ~$1.1B in cash and the assumption of ~$18M of center-level debt.
- Tenet will consolidate the financial results of the Portfolio within its Ambulatory Care segment; expects transaction to generate double-digit returns on invested capital within three years of completion, along with ~28% accretion to EPS in 2021.
- The company expects to realize ~$40M to $50M of annual run-rate synergies over the next three years.
- Transaction will be financed using balance sheet cash.
- Majority of the centers have been acquired while remainder of the portfolio will be acquired by the end of 2020 taking USPI's surgical portfolio to as many as 310 ambulatory surgical facilities, including 24 surgical hospitals, in 33 states.