November 9, 2021 – Tenet Healthcare Corporation, and its subsidiary United Surgical Partners International (USPI), have entered into a definitive agreement with the principals of SurgCenter Development (SCD) to acquire SCD.
Under the terms of the agreement, Tenet/USPI will acquire SCD’s ownership interests in 92 ambulatory surgery centers (ASCs) and related ambulatory support services for approximately $1.2 billion. The centers to be acquired are located in 21 states. The portfolio includes 65 mature centers, as well as 27 that have either opened within the last year or will start to perform their first cases in 2022.
USPI and SCD’s principals will also enter into a five-year partnership and development agreement designed to provide seamless continuity and support for SCD’s facilities and physician partners over the coming years. Going forward, USPI also has the exclusive option to partner with SCD on de novo development projects over the life of the agreement.
Additionally, in the coming months, USPI plans to offer to acquire a portion of equity interests in the ASCs from physician owners for incremental consideration of up to approximately $250 million. Assuming successful completion of the acquisition of physician interests, Tenet will consolidate the results of the centers in which USPI holds a majority ownership position in its financial statements.
SCD owns a minority interest of approximately 39% on average in 86 of the ASCs and a majority interest of approximately 55% on average in six of the ASCs. Tenet plans to finance the transaction through the issuance of first-lien secured notes.
The transaction is expected to close in the fourth quarter of 2021.
Following the addition of the Portfolio, USPI will have more than 440 facilities in 35 states.