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Tenet to pump the brakes on M&A activity

A string of mergers and acquisition helped Tenet secure its spot as the No. 3 hospital operator in the nation. However, the hospital network is now slowing its growth strategy to help improve its finances, according to The Dallas Morning News.

In early April, when S&P announced Tenet would be replaced on the S&P 500, the hospital network's market cap had dropped by $3 billion since July. The hospital network's long-term debt has almost tripled in the last three years to $14.4 billion, and Tenet ended 2015 with a net loss of $140 million.

To address its financial challenges, Tenet is now focused on improving operations and increasing cash flow rather than rapid growth through M&A, according to the report. The hospital operator plans to primarily target markets where it's one of the top players. As part of this push, Tenet recently sold five Atlanta-area hospitals to Marietta, Ga.-based WellStar Health System for $575 million.

Tenet's financial improvement plan also includes a large outpatient component. The hospital network has greatly expanded its outpatient presence in recent years to adjust to the overall shift in the industry. In 2015, Tenet became the largest U.S. provider of ambulatory surgery services through a joint venture with private equity firm Welsh, Carson, Anderson & Stowe, which merged Tenet's short-stay surgery and imaging center assets with Dallas-based United Surgical Partners

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