Tenet Healthcare to sell 3 South Carolina hospitals for about $2.4 billion

(Reuters) -Tenet Healthcare said on Friday it would sell three of its hospitals and related operations in South Carolina for about $2.4 billion in cash, in a move aimed at reducing its debt.

Shares of the Texas-based company rose 4.9% to $61 in premarket trading on the news.

Under the deal, a North and South Carolina hospital network – Novant Health – will purchase Tenet’s hospitals in Jasper, Beaufort and Charleston counties as well as affiliated physician practices and other related hospital operations.

Tenet added that ambulatory facilities in these markets will remain with the company.

The hospital operator is betting on growth in its ambulatory care unit, which deals with patients who are not bedridden and do not require overnight hospitalization.

The company estimates recording a pre-tax gain of about $1.6 billion as a result of this anticipated transaction.

The company had over $15 billion in long-term debt as of Sept. 30, and recorded adjusted core earnings of $854 million in the third quarter.

Tenet’s Conifer Health Solutions subsidiary will enter into a new and expanded fifteen-year contract to provide revenue cycle management services for the three hospitals and related operations as part of the deal.

The transaction is expected to be completed in the first quarter of 2024.

(Reporting by Pratik Jain in Bengaluru; Editing by Arun Koyyur and Saumyadeb Chakrabarty)