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Tenet Healthcare Buying Vanguard Health for $1.8 Billion

Sigrid Gombert | Cultura | Getty Images

Tenet Healthcare is buying Vanguard Health Systems for about $1.8 billion, helping to expand its service offerings and broaden its geographic reach.

The companies said Monday that the transaction also includes $2.5 billion in debt and value the entire deal at $4.3 billion.

Tenet will pay $21 per share, a 70 percent premium to Vanguard Health's Friday closing price of $12.37.

(Read More: Employers Test Plans That Cap Health-Care Costs)

Nashville, Tenn.-based Vanguard Health says its founder, Chairman and CEO Charlie Martin, will join Tenet's board.

Tenet expects annual savings of $100 million to $200 million and for the acquisition to add to earnings in the first year.

Dallas-based Tenet has secured fully committed financing for the transaction from Bank of America Merrill Lynch.

Both boards unanimously approved the deal, which is expected to close before year's end.

(Read More: Health-Care Cost Inflation on Track to Slow in 2014)

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