HealthSpan Partners, an affiliate of the nonprofit Catholic health system Bon Secours Mercy Health, agreed to acquire outpatient surgery operator Surgery Partners Inc. in an all-cash transaction valued at an enterprise value of about $5.7 billion, the companies said Monday.
Shareholders of Brentwood, Tenn.-based Surgery Partners, other than affiliates of Bain Capital Private Equity, will receive $23.50 a share in cash. That price is roughly 49% above where the stock closed on Friday. Bain, the company’s largest shareholder with about 39% of the shares, will roll its stake into equity of the acquiring entity and remain a significant partner after closing. Bain signed a voting and support agreement backing the transaction.
A hospital system bets on outpatient surgery
Surgery Partners operates more than 200 locations in 30 states, including ambulatory surgery centers, surgical hospitals, multispecialty physician practices and urgent care sites, and is affiliated with about 5,000 physicians. Its specialties include orthopedic and spine care, cardiology, gastroenterology and ophthalmology.
For Cincinnati-based Bon Secours Mercy Health, the acquisition is a large step into outpatient care, a setting that lets patients avoid hospital stays. It follows Ascension’s $3.9 billion purchase of Amsurg earlier this year, and it could open new exit routes for private equity owners of large physician and surgery platforms that have had few strategic buyers. The Surgery Partners price also comes about 18 months after the company turned down a higher take-private proposal from Bain.
The companies said Surgery Partners would keep its name, brand and headquarters, and would remain a secular organization rather than becoming a Catholic ministry entity. Its stock will be delisted from Nasdaq once the transaction closes.
Financing and advisers
HealthSpan Partners plans to pay for the acquisition with cash on hand and new debt, for which it has secured commitments. Jefferies is the exclusive financial adviser to HealthSpan Partners and provided committed financing as sole initial underwriter. Paul, Weiss, Rifkind, Wharton & Garrison is legal counsel and McGuireWoods is healthcare regulatory counsel.
A special committee of independent Surgery Partners directors negotiated the terms. Centerview Partners is lead financial adviser to Surgery Partners, with Leerink Partners also advising; Moelis & Co. advised the special committee, and Goodwin Procter served as its counsel. Ropes & Gray and McDermott Will & Schulte are counsel to the company. Kirkland & Ellis represented Bain, with Barclays and J.P. Morgan as Bain’s financial advisers.
What comes next
The transaction requires approval from Surgery Partners shareholders and regulators and is expected to close in the first quarter of 2027. The company plans to file a proxy statement and a Schedule 13E-3 with the Securities and Exchange Commission, which will lay out the background of the negotiations in more detail.
