By Sarah Cranwell
(The street)Tenet Healthcare Corp (NYSE:THC) shares are up 3.08% to $51.15 in morning trading as the hospital operator said it would form a joint venture with United Surgical Partners International in a cash and debt transaction that Reuters values at $1.93 billion.
The Tenet and USPI joint venture will be the largest provider of ambulatory surgery in the U.S., the company said. 
Under the terms of the agreement, Tenet will initially own 50.1% of the joint venture and will consolidate its financial results. Welsh, Carson, Anderson & Stowe and the other existing investors in USPI will initially own the remaining 49.9%. Tenet will have a path to full ownership of USPI over the next five years through a put/call structure.
Financially, the transaction is expected to be neutral to EPS this year and accretive to EPS in 2016, to sustainably increase EBITDA margins and EBITDA growth, and improve Tenet’s cash flow profile, the company said. The company expects a minimal increase in its leverage ratio in the near term and to remain on a path to reduce leverage over time.
“Through strong partnerships with physicians and leading health systems, USPI has built a network of relationships and facilities that are providing high quality surgical care across the U.S.,” said Trevor Fetter, Tenet’s president and CEO. “Creating this joint venture with the premier operator of short-stay hospitals and surgery centers has strategic and financial benefits for both parties. The partnership accelerates Tenet’s and USPI’s shared strategy to expand our ambulatory service offerings to meet growing consumer demand for services that are provided in a lower cost, more convenient setting and that are aligned with the long-term transition to value-based care,” Fetter added.