Tenet Healthcare (THC) Status update summary

Transaction overview

• Closed an accretive asset sale involving Conifer's revenue cycle management contract with CommonSpirit, valued at $2.65 billion through cash, liability reduction, and additional equity acquisition.

• CommonSpirit will pay $1.9 billion over three years, with an initial $540 million in Q1 2026 and three annual installments of $453 million each in 2027, 2028, and 2029; $540 million is offset by Tenet's redemption payment.

• Conifer will continue providing services to CommonSpirit through 2026 under existing financial terms.

• The transaction results in Tenet gaining full strategic control of Conifer and an increase of $305 million in additional paid-in capital.

• The transaction reduces redeemable non-controlling interest and other liabilities by $885 million.

Financial and operational impacts

• 2025 adjusted EBITDA is expected at the upper end of the $4.47–$4.57 billion guidance range, driven by strong same-store revenues and disciplined expense management.

• NCI expense will decrease by approximately $100 million in 2026 as Tenet recognizes all Conifer economics.

• The deal delivers an approximate 14x multiple on impacted 2025 adjusted EBITDA less NCI.

• The transaction is expected to strengthen cash flow and support capital deployment priorities, including share repurchases, M&A in ambulatory care, and organic growth investments.

• Actual results may differ from preliminary estimates as the financial statement close process is not yet complete.

Strategic rationale and future direction

• Full ownership enables Tenet to accelerate investments in automation, AI, and offshoring to enhance Conifer's efficiency and competitiveness.

• Conifer's innovation focus includes automating workflows, AI-driven denials management, and advanced analytics to reduce cost to collect and improve yield.

• The company plans to redeploy resources and pursue growth opportunities as the CommonSpirit contract winds down.

• No constraints were cited from the prior joint venture; future investments and decisions will be solely under Tenet's control.

• The transition is structured to be collaborative, supporting CommonSpirit’s insourcing strategy and Conifer’s continued innovation.