Key Takeaways
- • Bon Secours Mercy Health is in late-stage talks to buy a majority stake in Surgery Partners at about $20 per share, valuing the group at roughly $6bn including its $3.5bn debt, according to people familiar with the matter.
- • Bain Capital, a minority shareholder since 2017, will retain its almost 40 per cent stake as part of the take-private deal, which could be announced as soon as Monday.
- • The deal would end more than a year of stop-start sale efforts, following Surgery Partners' walk-away from a Bain-led go-private deal last year at a $6.7bn enterprise value.
- • Surgery Partners operates 176 surgery centres and hospitals across 30 US states, and the acquisition would significantly accelerate Bon Secours' expansion into outpatient care.
- • Bon Secours is the latest not-for-profit provider to pursue a large deal, following Ascension's $3.9bn purchase of Amsurg earlier this year.
Summary
Bon Secours Mercy Health, one of the largest not-for-profit health systems in the US, is nearing a takeover of Bain-backed surgical care provider Surgery Partners, according to people familiar with the matter cited by the Financial Times. The transaction would value the group at about $20 a share, or roughly $6bn including its $3.5bn debt pile, and could be announced as soon as Monday.
Bain Capital, which has been a minority shareholder in Surgery Partners since 2017, will retain its almost 40 per cent shareholding as part of the take-private arrangement. The sale would conclude more than a year of stop-start efforts to sell the company. Last year, Surgery Partners walked away from a go-private deal led by Bain at a higher valuation, and Bain's earlier attempt to buy the whole company at a $6.7bn enterprise value collapsed.
The deal reflects a broader trend among not-for-profit healthcare providers. Ascension, another Catholic non-profit, earlier this year agreed a $3.9bn deal to buy Amsurg, a comparable surgery care business. For Bon Secours, which runs 47 hospitals across the US and Ireland and generated approximately $14bn in revenues last year, the acquisition would significantly accelerate its expansion into outpatient care. Surgery Partners operates 176 surgery centres and hospitals across 30 US states.
Shares in Surgery Partners have fallen 31 per cent over the past year to just under $16, implying an equity value of nearly $2.1bn. Separately, Bon Secours has realised a significant return on its investment in healthcare payment software specialist Ensemble Partners, dating back to 2016; earlier this year Ensemble agreed to sell a majority stake to Thoreau Group at an $11.75bn valuation, with Bon Secours retaining a minority holding.
Bon Secours and Surgery Partners did not immediately respond to requests for comment, and Bain declined to comment.
Bain Capital, which has been a minority shareholder in Surgery Partners since 2017, will retain its almost 40 per cent shareholding as part of the take-private arrangement. The sale would conclude more than a year of stop-start efforts to sell the company. Last year, Surgery Partners walked away from a go-private deal led by Bain at a higher valuation, and Bain's earlier attempt to buy the whole company at a $6.7bn enterprise value collapsed.
The deal reflects a broader trend among not-for-profit healthcare providers. Ascension, another Catholic non-profit, earlier this year agreed a $3.9bn deal to buy Amsurg, a comparable surgery care business. For Bon Secours, which runs 47 hospitals across the US and Ireland and generated approximately $14bn in revenues last year, the acquisition would significantly accelerate its expansion into outpatient care. Surgery Partners operates 176 surgery centres and hospitals across 30 US states.
Shares in Surgery Partners have fallen 31 per cent over the past year to just under $16, implying an equity value of nearly $2.1bn. Separately, Bon Secours has realised a significant return on its investment in healthcare payment software specialist Ensemble Partners, dating back to 2016; earlier this year Ensemble agreed to sell a majority stake to Thoreau Group at an $11.75bn valuation, with Bon Secours retaining a minority holding.
Bon Secours and Surgery Partners did not immediately respond to requests for comment, and Bain declined to comment.
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