Surgery Partners is to merge with National Surgical Healthcare (NSH) after acquiring the company from Irving Place Capital for approximately USD760 million.
Funding for Surgery Partners’ acquisition of NSH will be provided in part by Bain Capital Private Equity, who as part of the transaction, is injecting capital in exchange for a preferred security in the company.
In conjunction with this transaction, Bain Capital Private Equity will acquire HIG Capital’s existing equity stake in Surgery Partners.
The transaction builds upon each company’s physician-centric services model. It creates a diversified inpatient and outpatient surgical provider with a portfolio of 125 surgical facilities, 58 physician practice locations and complementary ancillary services. The combined business will have a strong presence in musculoskeletal programmes, including orthopaedics, pain and spine.
The combined company will operate facilities in 32 states with a network of over 5,000 physicians.
“We are very excited about the acquisition of National Surgical Healthcare and welcome our new partnership with Bain Capital Private Equity,” says Mike Doyle, chief executive officer of Surgery Partners. “I would like to welcome the NSH team and physicians. This transaction strengthens our market position and will provide new opportunities to introduce ancillary services to our expanded network of surgical facilities. NSH and Surgery Partners share a commitment to high quality, cost effective healthcare services. We are optimistic that this combination will promote physician recruitment and new service line expansion while generating solid growth, and we expect this transaction to be accretive in 2018. We are thankful to have had the opportunity to grow the company with HIG Capital over the past seven years, and thank the entire HIG team for their support of our company and management team along the way.”
"This transaction fits well with our efforts to deliver strong clinical outcomes and high quality patient care,” says David Crane, chairman and chief executive officer of NSH. “Together we believe our physician-centric model will continue to draw interest and deliver on its goals of providing quality surgical services and superior facilities for patients, physicians and payers. We are very appreciative of the support and partnership that NSH has enjoyed from and with Irving Place Capital during their ownership of the company. We also appreciate Bain Capital Private Equity’s investment with the new combined company and look forward to the next chapter for NSH with Surgery Partners.”
John Howard, co-managing partner of IPC, says: “We have truly enjoyed working with David and his talented team as they have successfully executed on their strategy of building a leading operator in the surgical facility space. We are incredibly grateful for all of the hard work the team has put in during our ownership period and we wish them continued success.”
“Surgery Partners and National Surgical Healthcare have both demonstrated their ability to partner with physicians to deliver great clinical outcomes for patients. The combined company will create the market-leading platform for high-quality, cost-efficient surgical care,” says Devin O’Reilly, a managing director of Bain Capital Private Equity.
Bain Capital Private Equity has made investments across a broad range of healthcare sectors including service providers, facilities, life sciences, devices, and distribution. The firm’s experience owning facilities-based healthcare businesses includes HCA Healthcare, Acadia Healthcare, Air Medical and Grupo Notre Dame Intermedica.
The transaction is expected to close during 2017 and remains subject to the receipt of required regulatory approvals and the satisfaction of other customary closing conditions.