US-based healthcare services company Tenet Healthcare has agreed to sell two of its hospitals in San Luis Obispo County, California, to Adventist Health.

The company will sell its Sierra Vista Regional Medical Center and Twin Cities Community Hospital, along with affiliated physician practices and other related operations.

The transaction is valued at around $550m and is expected to be completed over the coming weeks, subject to regulatory approvals and closing conditions.

The two hospitals and related operations generated revenues of around $337m and adjusted EBITDA of nearly $38m for 12 months to 31 December 2023, excluding depreciation and amortisation expense of around $13m.

Tenet expects to register a pre-tax book gain of around $275m from this transaction.

In addition, the company’s subsidiary Conifer Health Solutions has agreed to provide revenue cycle services for Adventist Health.

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Conifer will provide services for more than $3.5bn in net revenue and use its advanced technologies and AI-driven workflows to improve Adventist Health’s cash flow performance and patient engagement.

Tenet Healthcare chairman and CEO Saum Sutaria said: “Adventist Health is a prominent healthcare system with a commitment to compassionate care and serving the communities of San Luis Obispo County.

“Furthermore, our revenue cycle services partnership will enable our organizations to apply new innovations to optimise the patient experience.”

Based in Dallas, Texas, Tenet Healthcare operates or holds ownership interests in more than 480 ambulatory surgery centres and surgical hospitals.

Earlier this month, the company sold three of its hospitals, associated physician clinics and operations in South Carolina to Novant Health. 

As part of the deal, Novant Health acquired East Cooper Medical Center in Mount Pleasant, Hilton Head Hospital, and Coastal Carolina Hospital in Hardeeville, along with multiple physician clinics and outpatient centres.

The deal is valued at around $2.4bn in cash, with after-tax proceeds of $1.75bn.