Novant Health strikes $2.4B deal to buy 3 hospitals from Tenet Healthcare

Novant Health has reached an agreement to buy three hospitals from Tenet Healthcare at a cost of about $2.4 billion, the organizations announced Friday.

Carl S. Armato, president and CEO of Novant Health, said the purchase of three hospitals from Tenet Healthcare is part of its long-term commitment to South Carolina. (Image: Novant Health)

Under the deal, Novant would acquire three hospitals in South Carolina: Hilton Head Hospital in Beaufort County, Coastal Carolina Hospital in Jasper County, and East Cooper Medical Center in Charleston County.

Novant and Tenet said they hope to complete the deal early next year. Regulators must approve the transaction.

If the deal is approved, Novant would expand its presence in South Carolina. Based in Winston-Salem, N.C., Novant operates 16 hospitals in North Carolina and South Carolina, along with 800 other healthcare locations. The nonprofit system boasts a workforce of 36,000 employees and has $7.6 billion in annual revenue.

Carl S. Armato, president and CEO of Novant Health, said the deal is one element of a long-term commitment to serving the region.

“As a health system rooted in the Carolinas, we are committed to expanding the communities we serve across our regional delivery network known for safe, quality, patient-centered care in South Carolina,” Armato said in a statement.

He added that Novant is committed to providing “personalized care that is easy to access and understand. This investment is the next phase of a long-term vision to improve the health and wellness of communities across South Carolina."

• Read more: FTC sues to block $142M California hospital deal

Novant has also recently established a collaboration with another South Carolina provider, Conway Medical Center, to expand healthcare services in the Pee Dee and Grand Strand regions, which are seeing rapid growth. Novant has also served South Carolina residents with its imaging company, MedQuest Associates.

Saum Sutaria, chairman and CEO of Tenet Healthcare, said he was pleased with the deal. He hailed Novant for what he called the organization’s “innovative approach to patient-centric healthcare.”

“Our three hospitals on the coast of South Carolina will become part of their network of care, bringing benefits for generations to come,” Sutaria said in a statement. “Working together, we'll work to ensure seamless continuity of care for patients, improve revenue cycle services, and enhance access to surgical procedures in convenient and safe outpatient settings.”

As part of the agreement, Tenet’s Conifer Health Solutions subsidiary will provide revenue cycle services to the three South Carolina hospitals when the deal is complete.

Tenet Healthcare, a for-profit health system based in Dallas, Texas, owns 61 acute care and specialty hospitals and more than 480 ambulatory surgical centers and surgical hospitals.

Healthcare mergers have slowed down due to the COVID-19 pandemic, but the pace of deal-making has picked up recently, and analysts expect to see more transactions in the coming months.

Through the first three quarters of 2023, there have been 53 announced hospital mergers, according to data from Kaufman Hall, the healthcare consulting firm. That already matched the 53 hospital mergers reported in all of 2022.

Just about a year ago, a large hospital merger took place involving a major player in the Carolinas. Atrium Health, based in Charlotte, N.C., and Advocate Aurora completed their merger last December, forming a new system called Advocate Health. The merged system operates 67 hospitals in six states.

Read more: Why diversity must be a ‘culture change strategy’