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Tenet Healthcare Divests Atlanta-Area Hospitals to WellStar (revised)

Tenet Healthcare Corporation (THC) divested five hospitals and their related operations in Atlanta to WellStar Health System for $575 million in cash. The divesture was announced last December.

The divestiture includes Atlanta Medical Center and its South Campus, North Fulton Hospital, Spalding Regional Hospital, Sylvan Grove Hospital and 26 physician clinics. Pursuant to the sales agreement, Tenet Healthcare will retain certain net working capital accounts while WellStar will assume certain capital leases related to the operation of the acquired facilities.

Tenet Healthcare evaluates where it can or can't build integrated delivery networks and areas with low market share. In this regard, Tenet Healthcare divested other hospitals in markets where it saw no chances of growth. Last November, the company said that it would sell two hospitals and 19 physician groups in North Carolina to Duke LifePoint. In Jun 2015, Tenet Healthcare divested St. Louis University Hospital to SSM Health. These divestitures would help Tenet Healthcare to focus on its core operations.  

Tenet Healthcare consistently enhances its business through strategic initiatives. The company is well positioned to benefit from incremental synergies, higher revenues, growth in the outpatient business, product launches and a sound capital structure.

Tenet Healthcare presently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the medical sector include VCA Inc. (WOOF), Amphastar Pharmaceuticals, Inc. (AMPH) and ABIOMED, Inc. (ABMD). While Amphastar and ABIOMED sport a Zacks Rank #1 (Strong Buy), VCA Inc. carries a Zacks Rank #2 (Buy).

(We are reissuing this article to correct a mistake. The original article, issued yesterday, April 4, 2016, should no longer be relied upon.)
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