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news.Tenet Healthcare, an investor-owned healthcare services company, has announced that two of its subsidiaries have signed a definitive agreement to sell USC University Hospital and USC Kenneth Norris Jr Cancer Hospital to the University of Southern California.
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The transaction is expected to generate cash proceeds of $275 million from the sale of property and equipment. From these proceeds, $30 million will be deferred and placed in an escrow account for up to four years.
In addition, Tenet’s subsidiaries will retain substantially all of the hospitals’ working capital, which is expected to result in approximately $35 million of incremental cash proceeds. Tenet expects to use the proceeds for general corporate purposes.
Under the agreement, USC has committed to offer employment to all or substantially all current employees who are in good standing. The transaction is subject to conditions and regulatory approvals that must be satisfied prior to closing.
The closing, which is not conditional on financing, is targeted for completion by March 31, 2009. As part of the transaction, Tenet and USC will drop all litigation pending between them.
Trevor Fetter, Tenet’s president and CEO, said: We’re pleased that our agreement to move forward with the sale of USC University Hospital and the Norris Cancer Hospital will bring enhanced clarity to the future of the hospitals and their fine staff. Tenet has been pleased to develop and operate these facilities as part of a first-rate academic medical center that is well positioned for the future.