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Tenet forms JV to create largest US ambulatory surgery provider

Tenet Healthcare's medical center in Atlanta
Erik S. Lesser | Bloomberg | Getty Images

Tenet Healthcare and United Surgical Partners International (USPI) will combine their ambulatory and short-stay surgery centers in a deal that will give Tenet the option to buy USPI over the next five years.

Tenet will pay $425 million to private equity firm Welsh, Carson, Anderson & Stowe and other USPI shareholders and assume $1.5 billion of USPI's debt for a 50.1 percent stake in the venture.

Tenet said the deal would create the largest provider of ambulatory surgery in the United States with 244 ambulatory surgery centers, 16 short-stay surgical hospitals and 20 imaging centers in 29 states.

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Tenet also said it would buy U.K.-based Aspen Healthcare from Welsh Carson for about $215 million in cash.

Tenet said it expects to raise $2.2 billion in debt, which would mainly be used to refinance USPI's debt.

The Wall Street Journal on Sunday reported Tenet was nearing a deal to buy USPI.

J.P. Morgan and Lazard are Tenet's financial advisers and Gibson, Dunn & Crutcher is its legal counsel.

USPI and Aspen are being advised by Barclays and Goldman Sachs. USPI's legal adviser is Ropes & Gray.