Tenet Healthcare Corporation (NYSE: THC) has announced a definitive agreement to sell its 70% majority ownership interest in Brookwood Baptist Health in Birmingham to Orlando Health for approximately $910 million in cash.
Hospital EBITDA Multiples
The press releases discloses that "for the twelve months ended June 30, 2024, Tenet’s equity interest in the Brookwood Baptist Health joint venture generated pre-tax income of approximately $12 million and an Adjusted EBITDA less non-controlling interest of approximately $60 million, excluding interest expense of approximately $2 million and depreciation and amortization expense of approximately $46 million."
Usually, we state the deal prices in our database as 100% of enterprise value, however, in this case, the disclosed valuation metric is EBITDA less NCI (NCI is the amount of profits allocated to minority partners). As a result, we are using the headline figures since we don't know how the NCI accounting works out.
The quoted figures imply an EBITDA multiple of 15.2x, which is in line with Tenet's other recent divestitures, if not the rest of the hospital M&A market.
About Scope Research
The Scope Research Healthcare M&A Valuation Database currently has financial details for 336 general acute care hospital deals going back to 2013, 190 of which include reported EBITDA multiples. The general hospital database can be purchased individually, while our affordable annual subscriptions provide access to all of our healthcare M&A databases and segments, updated continuously.
Don't hesitate to reach out to Will Hamilton at will@scoperesearch.co with questions.