Vanguard Health Systems To Be Acquired
Nashville-based Vanguard Health Systems will be acquired by Tenet Healthcare Corp., a Dallas-based health care services company, the organizations announced Monday.
Through the purchase, Tenet will resume ownership of Vanguard-owned MetroWest Medical Center in Framingham and Natick and St. Vincent Hospital in Worcester, after it sold the hospitals to Vanguard in 2004.
Following unanimous approvals from both board of directors, Tenet and Vanguard signed a definitive agreement, whereby Tenet will acquire the publicly-traded Vanguard for $21 per share, a purchase valued at $4.3 billion, according to Tenet and Vanguard. Tenet will also assume $2.5 billion in Vanguard debt.
Vanguard owns 28 hospitals in Arizona, Illinois, Massachusetts, Michigan and Texas, which will be added to Tenet's 49 existing hospitals and 122 outpatient centers. Tenet does not currently own any New England hospitals.
Tenet President and CEO Trevor Fetter said in a statement the Vanguard acquisition will create "significant new growth prospects for Tenet."
"This acquisition will take Tenet into new geographic markets, expand the breadth of our service offerings, diversify our earnings sources and increase the benefits we expect to realize under health care reform," Fetter said.
According to Fetter, Tenet expects "additional financial contributions to come from supply cost savings and labor management efficiencies" through the Vanguard acquisition.
Key Vanguard management members will join Tenet following the purchase, Tenet said, including Vanguard Chairman and CEO Charlie Martin, who founded the company, and Keith Pitts, Vanguard's vice chairman. Martin will join the Tenet board of directors, while Pitts will serve as vice chairman on Tenet's senior management team.
"Tenet's board and I are delighted that Charlie and Keith will be joining Tenet," Fetter said. "They are experienced healthcare executives for whom we have great respect. We hope to retain other members of Vanguard's management team and look forward to engaging with them now that the acquisition has been announced."
The acquisition is expected to close before the end of 2013, according to Vanguard and Tenet.
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