Sale Agreement Includes Hahnemann University
Hospital, St. Christopher’s Hospital for Children and Related
Operations
Tenet Healthcare Corporation (NYSE:THC) and Paladin Healthcare
today announced that they have entered into a definitive agreement
for the sale of Tenet’s Hahnemann University Hospital, St.
Christopher’s Hospital for Children and other related operations in
Philadelphia, including Tenet-owned physician practices, to
American Academic Health System, LLC (AAHS), a newly formed
affiliate of Paladin Healthcare.
The transaction is expected to be completed early next year,
subject to regulatory approvals and other closing conditions.
AAHS is a new company formed by Paladin Healthcare to own and
operate academic medical centers and general acute care hospitals
across the country. Paladin Healthcare currently manages four
general acute care hospitals in Southern California and Howard
University Hospital, a 145-year-old teaching hospital located on
the campus of Howard University in Washington, DC. The company’s
focus is on building strong healthcare delivery networks in urban
and suburban areas, including some of the nation’s most diverse
communities facing challenging healthcare environments.
“Tenet has been delivering quality medical care in Philadelphia
for nearly 20 years, and we are strongly committed to securing the
best future for Hahnemann and St. Christopher’s,” said Mike Halter,
Philadelphia Market CEO for Tenet and CEO of Hahnemann University
Hospital. “Paladin shares our commitment to providing
compassionate, exemplary care and service, and we believe that
entrusting the stewardship of these institutions to its affiliate
AAHS will benefit the patients, employees, physicians and community
for years to come.”
“We are excited to have been selected by Tenet to acquire
Hahnemann and St. Christopher’s, as well as the local physician
practices and other hospital-affiliated entities,” said Joel
Freedman, Chairman of Paladin Healthcare. “We are committed to
sustaining and enhancing the outstanding clinical and academic
programs at both hospitals, providing the capital investment they
need to thrive, and preserving their long-term future as
financially stable healthcare providers and employers. We are
pleased to have as our partner Harrison Street Real Estate Capital,
LLC, one of the country’s leading real estate investment management
firms.”
“Our leadership team has extensive, first-hand experience in
operating hospitals in the Philadelphia market and understands the
vital role Hahnemann and St. Christopher’s play in the Philadelphia
healthcare delivery system,” said Barry Wolfman, President of
Paladin Healthcare. “We appreciate Drexel University College of
Medicine’s support and look forward to working closely with the
entire physician community to continue the longstanding clinical
and academic excellence of both hospitals.”
Tenet expects to receive proceeds of approximately $170 million
from the transaction, comprised of $152.5 million in cash at
closing and a promissory note in the amount of $17.5 million.
During the 12 months ended June 30, 2017, Tenet’s Philadelphia
hospitals and related operations generated approximately $790
million of net operating revenue and an Adjusted EBITDA loss of
approximately $15 million. Tenet expects to record an estimated
non-cash impairment charge of approximately $230 million pre-tax
(approximately $150 million after-tax) within continuing operations
in the quarter ending September 30, 2017. Tenet also expects to
report a taxable loss on the sale of these assets of approximately
$200 million, which will increase the size of the Company’s federal
net operating loss carryforwards by a corresponding amount.
Additional details on the transaction can be found in a Form
8-K, which is being filed by Tenet with the Securities and Exchange
Commission.
About Tenet Healthcare
Tenet Healthcare Corporation is a diversified healthcare
services company with nearly 130,000 employees united around a
common mission: to help people live happier, healthier lives.
Through its subsidiaries, partnerships and joint ventures,
including United Surgical Partners International, the company
operates 77 general acute care hospitals, 21 short-stay surgical
hospitals and over 460 outpatient centers in the United States, as
well as nine facilities in the United Kingdom. Tenet’s Conifer
Health Solutions subsidiary provides technology-enabled performance
improvement and health management solutions to hospitals, health
systems, integrated delivery networks, physician groups,
self-insured organizations and health plans. For more information,
please visit www.tenethealth.com.
The terms “THC”, “Tenet Healthcare Corporation”, “the company”,
“we”, “us” or “our” refer to Tenet Healthcare Corporation or one or
more of its subsidiaries or affiliates as applicable.
This release contains “forward-looking statements” - that is,
statements that relate to future, not past, events. In this
context, forward-looking statements often address our expected
future business and financial performance and financial condition,
and often contain words such as “expect,” “assume,” “anticipate,”
“intend,” “plan,” “believe,” “seek,” “see,” or “will.”
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain. Particular uncertainties that
could cause our actual results to be materially different than
those expressed in our forward-looking statements include, but are
not limited to, the factors disclosed under “Forward-Looking
Statements” and “Risk Factors” in our Form 10-K for the year ended
December 31, 2016 and other filings with the Securities and
Exchange Commission.
About Paladin Healthcare
Paladin Healthcare builds strong healthcare delivery networks in
urban and suburban areas, including some of the nation’s most
diverse communities facing challenging healthcare environments.
Paladin’s hospitals and health systems are focused on quality,
operational efficiency, patient and employee engagement, financial
viability, managed care, and community advancement. In addition to
operating hospitals and health systems, Paladin offers access to
capital and a wide range of comprehensive financial solutions.
Headquartered in the Los Angeles area, Paladin manages four general
acute care hospitals in Southern California. Paladin also manages
Howard University Hospital, a 145-year-old teaching hospital and
Level I Trauma Center located on the campus of Howard University in
Washington, DC. Paladin has formed a new company known as American
Academic Health System (AAHS) to own and operate academic medical
centers and general acute care hospitals across the country.
About Hahnemann University Hospital
Hahnemann University Hospital is a 496-bed academic medical
center at Broad and Vine Streets in Philadelphia. The hospital is a
tertiary care institution that specializes in bariatric surgery,
cardiac services, OB/GYN, orthopedics, medical, surgical and
radiation oncology, bone marrow transplantation, renal dialysis,
kidney and liver transplantation, and transgender surgery. In 2009,
Hahnemann earned Magnet® designation by the American Nurses
Credentialing Center (ANCC) Magnet Recognition Program® and
received redesignation in 2015. Hahnemann is recognized by the
American Heart Association as a leader in stroke and heart care
treatments. Hahnemann is recognized as a Top Performer on Key
Quality Measures by The Joint Commission for attaining and
sustaining excellence in Heart Attack, Heart Failure, Pneumonia,
Surgical Care, Stroke and Perinatal measure sets. The hospital
performed one of the city’s first kidney transplants in 1963 and
one of the first bone marrow transplants in 1976. Hahnemann became
Philadelphia’s first Level I Regional Resource Trauma Center for
adults in 1986. Hahnemann is fully accredited by the Joint
Commission on the Accreditation of Healthcare Organizations, the
nation’s oldest and largest hospital accreditation agency. An
affiliate of Drexel University College of Medicine, Hahnemann
University Hospital is part of Tenet Pennsylvania, which also
includes St. Christopher’s Hospital for Children.
About St. Christopher’s Hospital for Children
Since 1875, St. Christopher’s Hospital for Children has been
providing exceptional patient care and advancing new pediatric
treatments through research and innovation. Through affiliations
with Drexel University College of Medicine, Hahnemann University
Hospital, Temple University School of Medicine, and Albert Einstein
Medical Center, St. Christopher’s is a teaching hospital helping to
train the next generation of professionals in pediatric medicine.
For more than 60 years, the hospital has been dedicated to not only
the education and training of physicians; but, that of nurses and
other allied health professionals.
St. Christopher’s is a 189-bed hospital that is committed to
delivering high-quality patient and family-centered care to
children in Philadelphia and throughout Pennsylvania and New
Jersey. It has a full range of pediatric subspecialists to support
the care of its patients and the families it serves. Its highly
acclaimed programs include the highest level of pediatric trauma
care and neonatal care, a Heart Center, Oncology unit and the only
dedicated pediatric burn center in the Philadelphia region. St.
Christopher’s also has one of the busiest emergency departments for
children in the country, with over 70,000 annual visits.
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version on businesswire.com: http://www.businesswire.com/news/home/20170901005433/en/
For Tenet Healthcare:Investor Contact:Brendan Strong,
469-893-6992investorrelations@tenethealth.comorMedia
Contact:Lesley Bogdanow,
469-893-2640mediarelations@tenethealth.comorFor Paladin
Healthcare:Media Contact:Blanco + Hopkins &
AssociatesGary Hopkins, 805-705-2586gary@blancohopkins.com
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