Surgery Partners Shares Rise More Than 21% Premarket Following Reported $6 Billion Bon Secours Deal

Surgery Partners (NASDAQ:SGRY) shares rose more than 21% in premarket trading on Monday following a Financial Times report that the US surgical care provider had agreed to be taken private by Bon Secours Mercy Health in a transaction valued at approximately $6 billion, including debt.

According to the report, which cited people familiar with the matter, Bon Secours Mercy Health would acquire a majority stake in Surgery Partners at approximately $20 per share.

Bain Capital, which has been an investor in Surgery Partners since 2017, would retain its existing stake of nearly 40% under the proposed ownership structure.

The reported enterprise valuation of approximately $6 billion includes $3.5 billion in debt.

Surgery Partners Valuation and Previous Take-Private Discussions

Before Monday’s premarket increase, Surgery Partners shares had declined approximately 31% over the preceding 12 months, trading at just under $16 per share.

At that level, the company’s equity market capitalisation stood at approximately $2.1 billion.

The proposed acquisition price of around $20 per share represents a premium of more than 25% to the stock’s trading level before the reported transaction.

The latest agreement follows an earlier attempt to take Surgery Partners private.

Last year, the company withdrew from a proposed transaction led by Bain Capital that valued the business at approximately $6.7 billion, including debt.

That valuation was higher than the approximately $6 billion enterprise value reported for the Bon Secours transaction.

A completed sale would conclude more than a year of intermittent efforts to secure a take-private agreement for Surgery Partners.

Bon Secours Seeks Expansion in Outpatient Surgical Care

Surgery Partners operates 176 surgical centres and hospitals across 30 US states, providing outpatient and other surgical services.

Bon Secours Mercy Health is one of the largest not-for-profit healthcare systems in the United States, operating 47 hospitals across the United States and Ireland.

The organisation generated approximately $14 billion in revenue last year.

The reported acquisition would expand Bon Secours’ presence in outpatient surgical services, an area of healthcare that includes procedures performed without requiring an extended hospital stay.

Surgery Partners’ existing network of surgical facilities would provide Bon Secours with additional operating capacity and a broader geographic presence.

Under the reported ownership arrangement, Bain Capital would continue as a significant shareholder, while Bon Secours would assume majority ownership.

Healthcare Sector Sees Further Surgical Services Transactions

The reported Surgery Partners agreement follows another transaction involving a major not-for-profit healthcare organisation and a surgical services provider.

Earlier this year, Ascension, a Catholic not-for-profit healthcare system, agreed to acquire Amsurg for approximately $3.9 billion.

Amsurg operates in a similar segment of the healthcare market to Surgery Partners, providing surgical services through outpatient facilities.

The two transactions involve healthcare systems expanding their exposure to outpatient care through acquisitions of established surgical services businesses.

For Bon Secours, the reported Surgery Partners acquisition would represent an investment in a network of existing facilities rather than expansion solely through new developments.

Surgery Partners Shares React to Acquisition Report

The more than 21% increase in Surgery Partners’ premarket share price followed publication of the reported acquisition terms.

The proposed price of approximately $20 per share exceeds the company’s trading level before the announcement, although it is associated with a lower overall enterprise valuation than the Bain-led proposal considered last year.

The Financial Times report identified Bon Secours as the prospective majority owner and Bain Capital as a continuing shareholder.

Further details regarding the transaction’s financing arrangements, regulatory approvals and expected completion timetable were not included in the supplied report.

Surgery Partners stock price