Bon Secours nears $6B takeover of Surgery Partners, FT reports

Bon Secours Mercy Health is nearing an agreement to acquire a controlling stake in Surgery Partners (SGRY) in a transaction valuing the outpatient surgical care provider at approximately $6 billion, including debt.

The nonprofit hospital operator is in advanced negotiations to acquire a majority interest in Surgery Partners (SGRY) at roughly $20 a share, the Financial Times reported Sunday, citing people familiar with the discussions. Bain Capital, which has held a minority investment since 2017, would retain its nearly 40% ownership stake as part of the take-private transaction.

For investors, the proposed acquisition highlights growing consolidation in outpatient healthcare as hospital systems seek to expand into lower-cost surgical facilities and diversify their revenue streams. The roughly $20-a-share valuation represents a premium of about 25% to Surgery Partners' (SGRY) recent trading price of just under $16, potentially offering shareholders an exit after a prolonged decline in the stock.

The transaction, which could be announced as early as Monday, would value Surgery Partners (SGRY) at approximately $6 billion, including about $3.5 billion in debt. Shares have fallen 31% over the past year, leaving the company with an equity market value of approximately $2.1 billion.

A deal would conclude more than a year of intermittent sale negotiations. Bain previously attempted to acquire the remaining shares of Surgery Partners (SGRY) in a transaction valuing the business at $6.7 billion, but those discussions collapsed last year.

Surgery Partners (SGRY) operates 176 surgical centers and hospitals across 30 states, providing Bon Secours with a substantial platform to expand its outpatient operations. Bon Secours currently operates 47 hospitals in the United States and Ireland and generated approximately $14 billion in revenue last year.

The potential acquisition follows a similar move by nonprofit hospital operator Ascension, which agreed earlier this year to acquire outpatient surgical services provider Amsurg for $3.9 billion. The transactions reflect growing interest among hospital systems in outpatient procedures, which can often be performed at lower costs than traditional hospital-based care.

Bon Secours also has benefited from its investment in healthcare payments software company Ensemble Partners, which recently agreed to sell a majority stake to Thoreau Group at an $11.75 billion valuation. Bon Secours retained a minority interest in that business. Neither Bon Secours nor Surgery Partners (SGRY) immediately commented on the reported negotiations, while Bain declined to comment to the Financial Times.