10 details about Tenet's $1.1B acquisition of 45 SurgCenter Development ASCs

Tenet acquired 45 ASCs from SurgCenter Development on Dec. 10 for $1.1 billion.

The company will add the surgical facilities to its ambulatory business, United Surgical Partners International. Here are 10 details about the acquisition.

1. The transaction will cement USPI as one of the largest ambulatory surgery facility chains in the U.S., with 310 facilities, including surgical hospitals.

2. USPI will have up to 60 percent ownership interest in the 45 acquired centers. The company acquired all of SurgCenter Development's interest and additional interest from physicians.

3. The acquired centers are 7 years old on average, on the relatively young end of the spectrum. The ASCs had about $18 million in debt.

4. Facility case mix is weighted toward musculoskeletal procedures, with 80 percent of the 800 medical staff physicians specializing in orthopedics, spine and pain.

5. Tenet expects the transaction will have double-digit returns on invested capital within three years. The acquired ASCs had 8 percent same-facility revenue growth historically and an earnings before interest, taxes, depreciation and amortization margin of more than 40 percent.

6. The company expects to realize $40 million to $50 million in annual run-rate synergies in the next three years.

7. The 45 purchased ASCs had about $430 million in revenue and $210 million of adjusted EBITDA.

8. UPSI now has more than 10,000 physicians on the medical staff and 4,000 physician partners.

9. USPI will enter new markets in Maryland, Indiana and Ohio with this acquisition. The 45 centers will expand the company's reach in Arizona, Florida and Texas, where it already has centers.

10. Tenet expects adjusted EBITDA from its ambulatory business to be about 42 percent in 2021, up from 33 percent in 2019 and 25 percent in 2016.


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