The deal, when it closes, will give Tenet a footprint in 30 markets across 16 states. Charlie Martin, Vanguard's founder, chairman and CEO, will join Tenet's board of directors, and Keith Pitts, Vanguard's vice chairman, will serve Tenet as vice chairman.
Trevor Fetter, president and CEO of Tenet
Tenet Healthcare Corp. jolted the hospital industry this week with the surprise announcement that it will acquire smaller rival Vanguard Health System in a deal the two for-profit hospitals chains valued at $4.3 billion.
This latest high-profile consolidation in the hospital industry is expected to be finalized by the end of this year, just as millions of people gain health insurance under the Patient Protection and Affordable Care Act.
"The acquisition of Vanguard significantly increases our scale and diversifies our geographic footprint increasing our hospital and outpatient facilities by 61% and 25% respectively," Trevor Fetter, president and CEO of Dallas-based Tenet said during a Monday conference call with analysts.
Fetter said that with the acquisition of Vanguard, Tenet "will go from 49 hospitals and 126 outpatient centers serving 24 markets across 11 states to 79 hospitals and 157 outpatient centers in 30 markets across 16 states."
"This acquisition will create a broader platform across which we can apply our skills is revenue cycle services, cost management, and quality improvement as well as our clinical integration and network development strategies," he says.
"Significantly, it enhances our growth opportunities. Tenet's strategic priorities have always placed value on the creation of leadership positions in our markets. We will now be No. 1 or No. 2 in 19 key markets. It is important to note that Tenet and Vanguard serve totally distinct markets with essentially no overlap. We are excited to add clear leadership positions it the growing and highly attractive San Antonio and South Texas markets, two of the crown jewels in Vanguard's portfolio."