Tenet Healthcare Corp. and Paladin Healthcare have entered into a definitive agreement that will see the sale of Tenet's Hahnemann University Hospital, St. Christopher's Hospital for Children and other related Philadelphia operations, including Tenet-owned physician practices, to American Academic Health System, a newly formed Paladin affiliate, Tenet announced.
The deal is expected to close early next year, pending regulatory approvals and other closing conditions.
AAHS will own and operate academic medical centers and general acute care hospitals nationwide. Paladin currently manages four general acute care hospitals in Southern California and Howard University Hospital, a 145-year-old teaching hospital located on the university's campus in Washington, D.C.
"The company's focus is on building strong healthcare delivery networks in urban and suburban areas, including some of the nation's most diverse communities facing challenging healthcare environments," Tenet said of Paladin in a statement.
Tenet's system staffs roughly 130,000 employees and operates 77 general acute care hospitals, 21 short-stay surgical hospitals and more than 460 outpatient centers.
Hahnemann University Hospital is a major academic medical center in Philadelphia that houses 496 beds and specialties including bariatric surgery, cardiac services, OB/GYN, orthopedics, medical, surgical and radiation oncology, bone marrow transplantation, renal dialysis, kidney and liver transplantation, and transgender surgery.
St. Christopher's is a teaching hospital with 189 beds that serves children throughout Pennsylvania and New Jersey. It staffs a range of pediatric subspecialists and provides trauma care, neonatal care, a Heart Center, Oncology unit and the only dedicated pediatric burn center in the Philadelphia region. St. Christopher's emergency department sees more than 70,000 annual visits, Tenet said.
Merger and acquisition activity has been documented for months now as being on the rise as a shifting industry landscape makes it increasingly difficult for stand-alone and smaller systems to stay independent. Upticks in M&A activity were noted in the first two quarters of 2017, including large-scale transactions for organizations with nearly one billion or more in revenues. Nonprofits have been a driving force behind the ongoing surge in activity as well.