Tenet Healthcare Corporation · NYSE:THC
Tenet Healthcare — Merger or Acquisition (December 2020)
14 slides from Tenet Healthcare's merger presentation, Dec 10, 2020
Slide 1: Expanding Ambulatory Surgery Portfolio
Expanding Ambulatory Surgery Portfolio December 10, 2020
Slide 2: Cautionary Statements
Cautionary Statements This presentation includes “forward-looking statements.” These statements relate to future events, including, but not limited to, statements regarding our expectations of the benefits and synergies of the acquisition and the performance of the centers, as well as our liquidity,
Slide 3: Announcement
Up to 45 centers to be acquired Announcement ~$1.1B purchase price Tenet to acquire a portfolio of centers from SurgCenter Development ~$430M of revenues (SCD), cementing USPI as the national leader in ambulatory surgery ~$210M of Adjusted EBITDA ~$130M of Adjusted EBITDA – NCI 3
Slide 4: Strategic Intent
Builds upon Tenet’s strategy to grow ambulatory surgery Continues to reposition the portfolio toward a higher-growth segment Enabled by strong performance at USPI and SCD centers USPI Q3 surgeries were ~94% of prior year; SCD is a premier ASC Strategic Intent developer and their centers have recover
Slide 5: USPI's portfolio is poised for growth
USPI’s portfolio is poised for growth Trusted business partner Proven management track record Continued portfolio expansion 10,000+ ~40% margin $315M+ physicians in 2019 since 2018 Commitment to clinical and operational Distinctive ability to deliver growth with a Successful expansion since 2018 wit
Slide 6: Leading Platform
Leading Platform USPI is the leading surgical facility platform with ~310 ASCs and 24 surgical hospitals across 33 states USPI surgical facilities Expected portfolio additions 6
Slide 7: Acquiring Up To 45 Ambulatory Surgery Centers
Acquiring high-performing portfolio from SCD Historical same-facility revenue growth of over 8% and EBITDA margin of over 40% with strong free cash flow conversion Strong focus on musculoskeletal with high-quality physicians Acquiring Up To ~80% case mix is orthopedics, pain and spine with over 800
Slide 8: Portfolio presents three types of opportunities
Portfolio presents three types of opportunities Network states – example Pioneering center – example New market entry – example d d Adding 10 centers to the network in Florida White Fence, over 10K total joints performed Entering in Indiana at scale with 7 centers Pictured left to right: SurgCenter
Slide 9: Deal Summary
~$1.1B Purchase price for the portfolio Acquire 100% SCD interest and additional interest from physicians ~$210M EBITDA generated by up to 45 centers to be acquired Deal Summary ~$430M in center-level net revenue and healthy EBITDA margins ~60% Maximum center ownership to be acquired by USPI EBITDA-
Slide 10: Strong financial returns expected for Tenet
Strong financial returns expected for Tenet Favorable EBITDA-NCI multiple Strong return on invested capital Meaningful EPS Accretion x % % ~6.9x ~10% ~28% End Year 3 End Year 3 End Year 1 10
Slide 11: Tenet is further diversifying into high-growth healthcare services
Tenet is further diversifying into high-growth healthcare services Tenet Adjusted EBITDA from Ambulatory % EBITDA ~42% ~33% ~25% ~4% 2014 2016 2019 2021E Note: Tenet acquired USPI in 2015 11
Slide 12: Tenet's Growth
Scaling the premier ambulatory surgery platform Robust pipeline of M&A, de novo development and organic growth Accelerating Restoring growth in core hospital markets More efficient, consistent operating model enabling bolder investments Tenet’s Growth Enhancing complement of leading physicians & Imp
Slide 13: Benefits of the transaction for Tenet
Benefits of the transaction for Tenet Enhances position in higher-acuity, high-growth specialties Competitive Advantage with strong quality, safety and patient experience Strategic investment to add quality assets and clinical Strategic Investments technology on a leverage neutral basis Higher-perfo
Slide 14: Questions & Answers
Questions & Answers 14
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