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Tenet Healthcare Completes Acquisition Of Vanguard Health Systems

Hospital operator Tenet Healthcare Corp. (THC) said Tuesday that it has completed its previously announced acquisition of Vanguard Health Systems, Inc. (VHS) for $21.00 per share of Vanguard stock. The acquisition is valued at about $4.3 billion, including the assumption of $2.5 billion of Vanguard debt.

Tenet Healthcare said in June 2013 that it agreed to acquire Vanguard Health in an all-cash deal. At that time, the company said it expects the transaction to be accretive to earnings in the first year, and sees annual synergies of $100 million to $200 million. As a result of the closing of the acquisition, Vanguard has now ceased trading on the New York Stock Exchange.

Nashville, Tennessee-based Vanguard owns and operates 28 acute care and specialty hospitals as well as complementary facilities and services in regions including Chicago, Phoenix, Detroit, Boston and San Antonio, Texas, metropolitan areas.

Tenet noted that the combined company will retain its headquarters in Dallas and maintain a significant operations office in Nashville. Following close of the transaction, Tenet now operates 77 acute care hospitals, 173 outpatient centers, five health plans and six accountable care organizations.

Tenet noted that an important new hospital is under construction in New Braunfels, Texas. In addition, the combined company includes Conifer Health Solutions, which provides health business process solutions at 15 service centers serving 600 clients across 43 states. Tenet employs more than 100,000 people.

Trevor Fetter, Tenet's president and chief executive officer said, "Through this acquisition, we have significantly increased our scale and expanded the services we offer. 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."

In early August, Tenet reported a loss for the second quarter that widened from last year, as one-time charges and a decline in patient admissions more than offset pricing increases. The company's second-quarter net loss was $50 million or $0.49 per share, wider than net loss of $6 million or $0.06 per share in the prior-year period. Net operating revenue for the quarter rose 7 percent to $2.42 billion from $2.27 billion in the year-ago period.

Vanguard, in mid-August, reported a decline in profit for the fourth quarter to $14.5 million or $0.18 per share from $19.3 million or $0.24 per share in the previous-year period. Consolidated total revenues grew 4.3 percent to $1.52 billion from $1.45 billion in the previous year.

THC closed Monday's trading at $41.19, up $0.86 on a volume of 1.15 million shares.

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