Healthcare services company Surgery Partners has successfully completed its previously announced acquisition of National Surgical Healthcare (NSH), an owner and operator of surgical facilities in partnership with local physicians.
On 9 May, 2017, Surgery Partners announced a definitive merger agreement under which Surgery Partners would acquire NSH from Irving Place Capital for approximately USD760 million. The combination of Surgery Partners and NSH creates an enterprise with 125 surgical facilities across 32 states, with a strong presence in musculoskeletal programs, including orthopaedics, pain and spine. In addition, the combined company operates a network of over 5,000 physicians and ancillary services, resulting in a diversified surgical provider.
“With the addition of National Surgical Healthcare, Surgery Partners has strengthened its position as the nation’s largest independent provider of outpatient surgical services. This transaction also enhances our focus on musculoskeletal specialties, where we anticipate significant growth as commercial payers and Medicare look to transition more procedures to the outpatient setting,” says Mike Doyle, Chief Executive Officer of Surgery Partners. “I would like to welcome the NSH team and physicians and look forward to working together to further develop our network healthcare services.”
Financing for the deal consists of Surgery Partners’ recently completed offering of USD370 million in 6.750 per cent senior unsecured notes due 2025, a new USD1.29 billion term loan and a new preferred security purchased by Bain Capital Private Equity. At closing, the Company remains well capitalised with sufficient liquidity to fund both internal and acquisition driven growth initiatives, with cash on the balance sheet in excess of USD180 million, in addition to a revolver entirely undrawn at close. Simultaneously with the closing of this transaction, Bain Capital Private Equity, as previously announced, has completed its purchase of HIG Capital’s 54 per cent stake in Surgery Partners at USD19 per share.
Jefferies LLC acted as the exclusive financial advisor to Surgery Partners and provided committed financing to the company for the transaction. Ropes & Gray LLP served as legal counsel to Surgery Partners, and PwC LLP has acted as accounting advisor to Surgery Partners and Bain Capital Private Equity. Kirkland & Ellis LLP acted as legal counsel to Bain Capital Private Equity. J.P. Morgan Securities LLC acted as financial advisor to NSH, and Weil, Gotshal & Manges LLP as legal advisor to NSH and Irving Place Capital.