Dallas-based Tenet Healthcare announced July 24 that it intends to spin off its revenue cycle management subsidiary Conifer Health Solutions by the end of the second quarter of 2021.
The decision to spin off Conifer into a separate publicly traded company marks the end of a strategic review process that began in December 2017. At that time, Tenet said it had enlisted financial and legal advisers to determine the best path forward for Conifer, including a potential sale.
Conifer, a provider of outsourced revenue cycle management services, launched in 2008 and currently manages roughly $25 billion in net patient revenue annually. Tenet Chairman and CEO Ronald A. Rittenmeyer said the decision to spin off Conifer supports the company's main objectives of maximizing the value of Conifer, building on its growth potential and delivering the best outcome for shareholders.
"Pursuing a tax-free spin-off is an important step forward in Conifer's evolution, and we believe the business is well-positioned to capitalize on its growth opportunities as a standalone company," Mr. Rittenmeyer said in a press release.
As it pursues the spin off, Tenet is also conducting a national search for a permanent leader for Conifer. Conifer Health Solutions COO Kyle Burtnett began serving as interim CEO on July 24 after Stephen M. Mooney stepped down as CEO.
Tenet is slated to release its results for the second quarter of 2019 on Aug. 5. Mr. Rittenmeyer provided a preview of those results on July 24.
"We were pleased with Tenet's performance in the second quarter, with adjusted EBITDA comfortably within our outlook range and consistent with consensus estimates," he said. "Volume growth strengthened in our hospital business, with increases in both admissions and adjusted admissions. USPI also delivered favorable volume growth and Conifer had another strong quarter. We remain excited about the future of our healthcare services offerings at our 65 hospitals and approximately 500 outpatient centers which will remain part of the Tenet enterprise."
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