Dallas-based Tenet Healthcare has agreed to sell its 70% majority ownership interest in Birmingham, Ala.-based Brookwood Baptist Health to Orlando (Fla.) Health.
The proposed transaction includes five hospitals, with a total of more than 1,700 beds, as well as affiliated physician practices and other related operations:
- Brookwood Baptist Medical Center (Birmingham)
- Princeton Baptist Medical Center (Birmingham)
- Walker Baptist Medical Center (Jasper, Ala.)
- Shelby Baptist Medical Center (Alabaster, Ala.)
- Citizens Baptist Medical Center (Talladega, Ala.)
The proposed deal is valued at approximately $910 million in cash with after-tax proceeds of approximately $790 million, according to Tenet. Under the proposed agreement, Tenet's revenue cycle management arm, Conifer Health Solutions, will enter into a 10-year contract to provide services for the Alabama hospitals and related operations.
Tenet and Orlando Health, a 17-hospital health system, expect the deal to close in fall 2024. The transaction is subject to customary regulatory approvals, clearances and closing conditions.
Brookwood Baptist Health formed in 2015 through a joint venture between Baptist Health System in Alabama and Tenet. Under the proposed deal, Brookwood Baptist Health will remain a joint venture with Baptist Health System. The system will become Baptist Health, and Thibaut van Marcke, currently senior vice president of Orlando Health Southeast Region and president of Orlando Health Dr. P. Phillips Hospital, will lead Orlando Health's efforts in Alabama, according to Orlando Health.
Tenet reported net income of $259 million in the second quarter of 2024, up nearly 111% from $123 million for the same quarter in 2023. Tenet anticipates recording a pre-tax book gain of approximately $375 million as a result of this anticipated transaction in Alabama.