Project Description

Tenet Health Spin-off (Conifer) Notes

December 3, 2020 – Update

  • Tenet announced that it has hired J. Roger Davis, who has over 30 years of experience in healthcare services, as its new CEO for Conifer Health Solutions.
  • Tenet also reiterated that the the spin-off is targeted for Q2 2021 although it will depend on market conditions.
  • Tenet has very high debt (6.9x debt to ebitda) and plans to use the spin-off to help de-lever.
    • Tenet would need to pass off a huge amount of debt for it to be a de-levering event!
  • I’m not too excited about Conifer. In 2019, prior to the pandemic (in other words, a good macro environment), Conifer saw sales decline by 11%.

    • EBITDA margins increased but continued margin expansion isn’t sustainable with declining revenue.
  • In Q3′ 20, the trends were similar, revenue down and and EBITDA up. Still not too encouraging.


July 24, 2019 – Update

  • On July 24, 2019, Tenet Healthcare (THC), one of the largest for profit hospital chains, announced that it will spin off of its Conifer Health Solutions (Conifer) business instead of selling it. Conifer handles patient payments for health care providers.
  • Conifer Health Solutions is a healthcare services partners with more than 800 clients to strengthen their financial and clinical performance. Conifer Health helps organizations transition from volume to value-based care, enhance the consumer and patient healthcare experience and improve quality, access to healthcare and control costs. Conifer Health manages more than 24 million unique patient interactions, and $30 billion in net patient revenue and $21.5 billion in medically managed spend. Conifer Health also provides technology and health management services to support care management for 5.7 million lives.
  • According to press reports, the business has the potential to be valued up to $2.0BN. While the sale process generated significant strategic interest, THC management ultimately decided that a tax free spin-off would maximize shareholder value. In 2018, Conifer generated $1.533BN of revenue and $357MM of adjusted EBITDA (+26% growth over 2017). Unfortunately, the spin-off is not expected to be completed until Q2 2021.