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HEALTHCARE M&A AND VALUATION
NEWS & INSIGHTS

Hospital EBITDA Multiples: Tenet Sells Pacific Coast Network to UCI Health (~13.7x EBITDA)

The Regents of the University of California, on behalf of the University of California, Irvine, has entered into a definitive agreement with Tenet Healthcare Corporation (NYSE: THC) to acquire Tenet’s Pacific Coast Network in Orange and Los Angeles counties. The network will become part of UCI Health, the clinical enterprise of UC Irvine.


The acquisition brings four Tenet hospitals (Fountain Valley Regional, Lakewood Regional, Los Alamitos Medical, and Placentia-Linda) and their associated outpatient facilities under the UCI Health umbrella. This expands UCI's reach, solidifying its position as a dominant healthcare provider in Orange County. More importantly, the deal integrates Tenet's patient base into UCI's academic medical system, potentially unlocking a wealth of research opportunities and clinical advancements.


Hospital EBITDA Multiples


The purchase price for the four hospitals is just shy of a billion at $975 million, according to a Tenet press release. For the year ended December 31, 2023, the four hospitals and related operations included in the sale generated revenues of approximately $1 billion, pre-tax income of approximately $29 million, and adjusted EBITDA of approximately $71 million. The transaction implies multiples of ~1.0x revenue and 13.7x EBITDA, one of the higher reported EBITDA multiples for general acute hospitals in our database, but lower than the implied multiple from Tenet's recent divestiture in South Carolina.


Hospital Deals w/ Valuations over $200m since 2019
EBITDA Multiples from Large Hospital Deals

South Carolina Divestiture


In November, Tenet announced it was divesting three hospitals and related operations in South Carolina to Novant Health (Coastal Carolina Hospital in Jasper County, Hilton Head Hospital in Beaufort County, East Cooper Medical Center in Charleston County). That deal was for approximately $2.4 billion cash, for operations that generated revenue of $552 million and adjusted EBITDA of $150 million, implying whopping multiples of 4.4x revenue and 16x EBITDA. The South Carolina operations generate the highest margins (by far) for any general acute care hospital assets acquired since 2013. Tenet's stock price has increased from $53/share prior to the South Carolina announcement to over $89/share as of this writing.


About Scope Research

The Scope Research Healthcare M&A Valuation Database currently has financial details for 320 general acute care hospital deals going back to 2013, 182 of which include reported EBITDA multiples. The general hospital database can be purchased individually, while our affordable annual subscriptions provide access to all of our healthcare M&A databases and segments, updated continuously.


Don't hesitate to reach out to Will Hamilton at will@scoperesearch.co with questions about your specific situation.


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