Tenet Healthcare, a healthcare services company based in Dallas, Texas, has closed its previously announced acquisition of Vanguard Health Systems.
The deal is worth around $4.3bn, or $21.00 per share of Vanguard stock, including the assumption of $2.5bn of net Vanguard debt.
Tenet will retain its Dallas headquarters and maintain a significant operations office in Nashville, the previous corporate headquarters of Vanguard.
The acquisition is expected to result in annual synergies of around $100m to $200m.
It will also expand Tenet’s footprint, which previously stood at 49 hospitals. Tenet will now operate 77 hospitals, 173 outpatient centers, five health plans and six accountable care organisations.
Tenet president and CEO Trevor Fetter said that through the acquisition, Tenet has significantly increased its scale and expanded the services it offers.
"We intend to be a leader in addressing the opportunities in our healthcare system, and we are strongly positioned to drive improvements in quality and value for the millions of people to whom we provide care," Fetter added.
Following the closing, Vanguard Health Systems has ceased trading on the New York Stock Exchange.
Tenet obtained financing from Bank of America Merrill Lynch for the acquisition, which was approved by both companies’ boards of directors.
Following the closing, Vanguard’s founder, chairman and CEO, Charlie Martin, will join Tenet’s board of directors while Vanguard’s vice chairman, Keith Pitts, will join the Tenet senior management team as vice chairman.
The acquisition will also include a substantial contribution from the application of Conifer Health Solutions, which provides health business process solutions at 15 service centres serving 600 clients across 43 states.
Gibson Dunn & Crutcher served as Tenet’s legal counsel and Lazard acted as lead financial and strategic advisor. Bank of America Merrill Lynch, Barclays and Teneo Capital also served as advisors for Tenet.
The acquisition is expected to expand Tenet’s geographic reach, enhance its service offerings, diversify its earnings sources, and secure financial gains from supply cost savings and labour management efficiencies.