Tenet Healthcare has reached a definitive agreement to sell its 70% ownership interest in Brookwood Baptist Health in Birmingham, Alabama, US, to Orlando Health.

The all-cash deal is valued at approximately $910m, with after-tax proceeds expected to be $790m.

Brookwood Baptist Health was established in 2015 as a result of a merger between Tenet Healthcare and Baptist Health System.

The latest transaction involves five hospitals in Central Alabama with a capacity of more than 1,700 beds, over 70 speciality and primary care clinics, as well as nearly 1,500 affiliated physician practices and operations.

The hospitals that are part of the transaction are Brookwood Baptist Medical Center, Walker Baptist Medical Center, Princeton Baptist Medical Center, Citizens Baptist Medical Center and Shelby Baptist Medical Center.

Following the sale, Brookwood Baptist Health will continue as a joint venture with Baptist Health System, which will maintain its faith-based status and partnership.

Orlando Health will assume management of the day-to-day operations of the Birmingham hospitals in collaboration with the Baptist Health System.

Additionally, Tenet's subsidiary Conifer Health Solutions is set to provide extended revenue cycle management services to the associated hospitals and operations as part of a new ten-year contract.

For the 12 months, which ended on 30 June 2024, Tenet's share in the joint venture reported a pre-tax income of around $12m and adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) less non-controlling interest of about $60m.

Tenet now anticipates a pre-tax book gain of approximately $375m from the sale.

Completion of this transaction is expected in the fourth of this year.

The deal is currently subject to receipt of necessary regulatory approvals and other closing conditions.  

Baptist Health System president and CEO Amy Allen said: “We are pleased to have Orlando Health join Brookwood Baptist Health as a majority and managing partner. They have a proven track record in delivering high-quality healthcare services and are well positioned to invest in our community.”

Orlando Health includes a network of hospitals, speciality institutes, emergency rooms, and various healthcare services across multiple locations.

In April 2024, Tenet concluded the sale of its six hospitals and associated operations in California to UCI and Adventist.