Tenet Announces Sale of Three Hospitals to Prime Healthcare Management, Inc.
enet Healthcare Corporation (NYSE: THC) today announced that a company subsidiary has completed the sale of the Encino campus of Encino-Tarzana Regional Medical Center, a 151-bed acute care hospital located in the Los Angeles area, to Prime Healthcare Services of Victorville, Calif. The sales price was not disclosed. Both the Encino and Tarzana campuses of Encino-Tarzana Regional Medical Center have been slated for divestiture since the first quarter of 2004.
Separately, the company also announced today that Prime Healthcare has entered into definitive agreements to acquire two additional Tenet hospitals in California – 167-bed Garden Grove Hospital and Medical Center, and 64-bed San Dimas Community Hospital.
Prime Healthcare operates 10 acute care hospitals, including Encino, and has more than 6,000 employees in Southern California. Prime Healthcare has agreed it will continue to operate these three facilities as acute care hospitals, maintain their emergency departments and offer employment to substantially all employees in good standing.
Stephen L. Newman, M.D., Tenet’s chief operating officer, said, “Garden Grove Hospital and Medical Center and San Dimas Community Hospital are in highly competitive markets. Because of some unique challenges, these hospitals did not lend themselves to the successful implementation of our Targeted Growth Initiative; therefore, we made a decision to divest them from our portfolio. These two hospitals were only marginally profitable in 2007, and neither had positive cash flow. California remains an important state for Tenet where we will continue to invest our resources and improve our services.”
The transactions are subject to customary regulatory approvals and are expected to be completed in approximately 30 days.
The Tarzana campus of Encino-Tarzana Regional Medical Center is not a part of this transaction. Talks between Tenet, HCP, Inc. – the real estate investment trust that owns the Tarzana campus building and property – and a potential buyer are continuing. The parties are in the final stages of negotiating a binding agreement and performing related due diligence.
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