Tenet Makes Move In South Texas

“The opportunity to expand in Texas at this time well in advance of full implementation of health reform is a very attractive feature of this transaction,” Fetter said.

Just less than 10 years ago, Tenet Healthcare Corporation sold Brownsville Medical Center to the Valley Baptist Health System amid a major restructuring of its operations in 2004, and because it was in a geographic market that the company said it no longer intended to serve.

But that has now changed.

The hospital, now known as Valley Baptist Medical Center-Brownsville, and Valley Baptist Medical Center-Harlingen are among 28 hospitals and facilities that Tenet intends to buy. Other hospitals and facilities are in San Antonio and other parts of the country.

Tenet announced Monday that it and Vanguard Health Systems Inc., which owns and operates the 28 hospitals and facilities, have signed an agreement: Tenet will acquire Vanguard for $21 per share in an acquisition valued at $4.3 billion, including the assumption of $2.5 billion in Vanguard debt.

In an early Monday morning telephone conference, Tenet President and CEO Trevor Fetter said that the South Texas and San Antonio markets are two of the

“crown jewels” in Vanguard’s portfolio.

“The opportunity to expand in Texas at this time well in advance of full implementation of health reform is a very attractive feature of this transaction,” Fetter said.

Just less than two years ago in September 2011, Vanguard and Valley Baptist Health System entered into a joint venture with Vanguard acquiring a 51 percent equity interest in the joint venture that acquired the assets of the Valley Baptist Health System.

Manny Vela, president and CEO of the Valley Baptist Health System since March last year, did not respond to a request for comment, while spokeswoman Teri Retana referred inquiries to a copy of Tenet’s press release and telephone conference held earlier in the day.

She did not respond as to how this could impact the Harlingen and Brownsville hospitals or top management of the system and hospitals.

During the telephone conference, Fetter said that geographically, the transaction “increases our reach significantly and enhances our growth opportunities.”

The transaction, which is expected to close by the end of the year, will increase Tenet’s ownership to 79 hospitals and 157 outpatient clinics.

Fetter also said: “We see the opportunity to recruit and retain Vanguard’s operational and corporate talent as a real plus in this acquisition.”

Tenet spokesman Steven Campanini was with the firm when it sold the Brownsville Medical Center in 2004.

“I remember it,” Campanini said. “It was a much different time. It was a much different company 10 years ago than what the company is today with a different management team and it was a different time and those issues are in the distant past,” he said. “We are very excited about the opportunities that the Vanguard hospitals bring to the Tenet portfolio.”

When told that numerous people here had been shocked and surprised to hear of the developments, Campanini noted: “It played out the way it was supposed to play out; it was very quiet until we announced it.”

By Emma Trevino, Brownsville Herald

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