10 things worth knowing about investor interest in Surgery Partners

Leading ASC operator Tenn.-based Surgery Partners has attracted investor attention amid steady growth and rumors of potential buyouts, according to a recent analysis by the Brentwood, Tenn.-based firm. Alpha wanted.

Here are 10 key points worth knowing:

1. Surgery Partners completed $225 million in acquisitions across 16 deals in 2023, $245 million across 13 deals in 2022, and $325 million across 12 deals in 2021, according to the analysis.

2. The company reported earnings before interest, taxes, depreciation and amortization of $118.3 million, an increase of 18.1% year-over-year.

3. Surgery Partners raised its full-year guidance, now forecasting more than $3 billion in revenue and more than $508 million in adjusted EBITDA.

4. At the end of the first half of 2024, Surgery Partners had almost $215 million in cash and marketable securities. The company is reducing net leverage and plans to achieve at least $200 million in free cash flow by 2025.

5. Surgery Partners currently has 17 de novo projects in development with over $100 million in future deals.

6. The company has entered into strategic partnerships with Intermountain Health, Methodist Health System and OhioHealth.

7. The company operates a network of over 200 locations in 33 states and employs over 4,600 affiliated physicians. As of June 30, the ASC Surgery Partners network consists of 167 facilities.

8. Several groups — including UnitedHealth Group, Optum’s parent company — are competing to acquire Surgery Partners. The deal with UnitedHealth is reportedly in its early stages. Another group competing to purchase the company is private equity firm TPG.

9. If TPG acquires Surgery Partners, the company is expected to make smaller bolt-on acquisitions to gain market share in the fragmented ASC sector. According toAlpha wanted In the report, TPG would likely add some debt to increase the company’s financial leverage, allowing for a special payout to reduce equity at risk – a common practice in the private equity market.

10. If UnitedHealth completes the acquisition, it will likely direct some of its insured customer base to Surgery Partners’ short-stay surgical centers, which offer lower costs than traditional hospital-based surgical centers.