MetroWest Medical Center Sold to Former Owner in $1.73 Billion Deal

Dallas-based Tenet Healthcare Corp will acquire Nashville-based Vanguard in a $1.73 billion deal.

The deal announced Monday, means that MetroWest Medical Center will be owned by Tenet Healthcare Corp again.

Dallas-based Tenet said it would expand to 79 hospitals from 49, and significantly increase its geographic reach, adding markets such as Detroit and Chicago and particularly deepening its presence in Texas, reported the Wall Street Journal.

Tenet also said the acquisition marks what it hopes will be a stepped-up effort to acquire other hospitals, where its deal pace has been relatively slow.

One of the benefits of the Vanguard deal is that it combines complementary management strengths: Tenet’s ability to generate organic growth and Vanguard’s ability to grow through acquisitions and partnerships, said Tenet president and CEO Trevor Fetter.

“This is a turning point for our company,” Fetter told the DallasNews.com. “You should expect us to be much more active in acquisitions going forward.”

For-profit Vanguard owns and operates 28 acute care and specialty hospitals in the Midwest, South and Massachusetts, including MetroWest Medical Center in Framingham and Leonard Morse Hospital in Natick.

Tenet's offer of $21 per share is a 70 percent premium over Vanguard's Friday close and represents the highest price for the stock since the company's initial public offering in 2011, reported the Chicago Tribune.

 The deal, expected to close by the end of the year, also includes the assumption of $2.54 billion in debt.

Analysts said the premium paid by Tenet was reasonable, given the potential savings from the deal. Tenet said it expects the deal to add to earnings in the first year and estimates annual savings of $100 million to $200 million, reported the Chicago Tribune.

Tenet sold MetroWest Medical Center to Vanguard in 2004 for $126.7 million.

Last week, MetroWest Medical Center CEO Andrei Soran began a new job with Vanguard Health Systems, the hospital said in a statement. Soran served as MetroWest's CEO for seven years.

Chuck Orlando, Vanguard's New England region COO, according to a press release, will serve as interim CEO while Vanguard conducts a national search for a replacement.