Tenet Healthcare Corporation THC has entered into an agreement with WellStar Health System to divest its five hospitals in Atlanta to the latter. The deal is pending regulatory approvals and is expected to culminate by the first quarter of 2016.
The five hospitals to be sold are the Atlanta Medical Center and its South Campus, North Fulton Hospital, Spalding Regional Hospital, Sylvan Grove Hospital, and 26 physician clinics. Tenet Healthcare expects the hospitals and stakeholders to reap benefits under the eminent WellStar healthcare network.
In turn, the divestiture is slated to help Tenet Healthcare to focus on its core operations. Divesting non-core operations is a strategy adopted by many to enhance their core business as well as to free up capital for deploying toward growth initiatives or boosting shareholders’ return.
To keep itself updated and well-equipped to adapt to the changes in the healthcare reform, Tenet Healthcare has been undertaking a number of strategies. In Sep 2015, the company sold Saint Louis University Hospital to Saint Louis University (“SLU”). Tenet Healthcare decided to sell the hospital in order to cope with the rapid changes in the healthcare system.
Last month, Tenet Healthcare entered into a definitive agreement with Duke LifePoint Healthcare per which, the insurer will divest its North Carolina hospitals and related operations to the latter. The deal is pending regulatory approvals and is expected to culminate by middle of the first quarter of 2016.
Tenet Healthcare currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the healthcare space that warrant a look include Adeptus Health Inc. ADPT, MEDNAX, Inc. MD and Acadia Healthcare Company, Inc. ACHC. While Adeptus Health and MEDNAX sport a Zacks Rank #1(Strong Buy), Acadia Healthcare holds a Zacks Rank #2 (Buy).
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