Tenet Healthcare Corp. completed the $170 million sale of its last two Philadelphia hospitals—Hahnemann University Hospital and St. Christopher's Hospital for Children—to American Academic Health System, an affiliate of Paladin Healthcare.
The deal was initially announced in early September as part of eight low-margin U.S. hospitals and nine hospitals and clinics in the United Kingdom that Tenet planned to offload to reduce debt and focus on healthier operations where it has leading market share. American Academic also gets Tenet's related healthcare operations in Philadelphia including physician-owned practices.
Simultaneously announced with the transaction closing, American Academic and real estate investment firm Harrison Street Real Estate Capital, formed a joint venture to acquire a portfolio of four medical office buildings and a parking garage on the Hahnemann University Hospital campus, and the parking facilities at St. Christopher's Hospital for Children. American Academic has retained ownership of the hospital buildings, as well as one medical office building and two parking facilities.
"We are thrilled and proud to be the new owners of these venerable Philadelphia hospitals and the outstanding clinical and academic programs for which they are recognized," Joel Freedman, American Academic's founder and CEO, said in a statement. "We look forward to collaborating closely with Drexel University College of Medicine and the entire physician community."
Former Tenet CEO Trevor Fetter told analysts in September that the $100 million Tenet spent for St. Christopher's new hospital tower was a mistake given the way the Philadelphia market changed in the six years the project took to complete. Hahnemann, which is the teaching hospital for the Drexel University College of Medicine, and St. Christopher's had a margin of 4% combined on earnings before interest, taxes, depreciation and amortization.
In addition to hospital sales, more job cuts and management restructuring, Tenet is also looking to deal its revenue cycle management business Conifer Health Solutions, which could fetch at least $2 billion in net proceeds, analysts said.
