Tenet to Sell Three Massachusetts Hospitals to Vanguard

Tenet Healthcare Corp., a hospital chain under federal investigation, said Tuesday that it had agreed to sell three Massachusetts hospitals for about $126.7 million to Vanguard Health Systems Inc. as part of a plan to return to profitability.

The sale of the hospitals and assets as well as proceeds from a tax benefit will total about $167 million, the Santa Barbara-based company said.

Tenet, which has reported a net loss for the last six quarters amid the government investigations, said in January that it would sell 27 of its 100 hospitals. Tenet now has agreements to sell 18 facilities as part of its turnaround strategy, spokesman Steven Campanini said.

“The company has identified a core group of 69 hospitals that are best positioned to return the company to profitability,” Campanini said.

The Justice Department, the Securities and Exchange Commission and the Department of Health and Human Services are investigating allegations that Tenet overcharged the government’s Medicare health program for the elderly.

Shares of Tenet, the second-biggest U.S. hospital chain by market value, fell 25 cents to $10.94 on the New York Stock Exchange on Tuesday. They have fallen 32% this year.

Vanguard Health Systems, based in Nashville, will pay $100.3 million for the hospitals and equipment as well as about $26.4 million for working capital, or the amount of assets minus liabilities.

Vanguard plans to continue the employment, pay and benefits of the hospitals’ workers. Tenet and Vanguard expect to complete the sale by Dec. 31.

The Massachusetts hospitals being sold are St. Vincent Hospital at Worcester Medical Center in Worcester and the two-campus MetroWest Medical Center, consisting of Leonard Morse Hospital in Natick and Framingham Union Hospital in Framingham.

Vanguard, a subsidiary of private investment firm Blackstone Group, owns and operates 16 hospitals in the U.S.