Bon Secours nears $6bn takeover of Bain-backed Surgery Partners
US hospital chain is the latest not-for-profit healthcare provider to seek a large deal
One of the largest not-for-profit health systems in the US is nearing a takeover of Bain-backed surgical care provider Surgery Partners, in a deal which would value the group at roughly $6bn including debt.
Bon Secours Mercy Health is in late-stage talks to buy a majority stake in Surgery Partners, valuing the group at about $20 a share, according to people familiar with the matter.
Private equity group Bain Capital, which has been a minority shareholder since 2017, will retain its almost 40 per cent shareholding in Surgery Partners as part of the take-private deal.
The potential deal, which could be announced as soon as Monday, will give Surgery Partners an enterprise value of roughly $6bn including its $3.5bn debt pile, the people added.
The sale would draw to a close more than a year of stop-start efforts to get Surgery Partners sold, after the company walked away from a go-private deal led by Bain at a higher valuation last year.
Bon Secours is the latest not-for-profit healthcare provider to strike a large deal. Ascension, another Catholic non-profit, earlier this year struck a $3.9bn deal to buy surgery care provider Amsurg, a similar business to Surgery Partners.
An acquisition of Surgery Partners would significantly accelerate Bon Secours’ expansion into outpatient care. Surgery Partners operates 176 surgery centres and hospitals across 30 US states.
Shares in Surgery Partners are down 31 per cent over the past year to just under $16 a share, or an equity value of nearly $2.1bn.
Bon Secours has made a significant return on its investment in healthcare payment software specialist Ensemble Partners dating back to 2016. Earlier this year, the software group struck a deal to sell a majority stake to Thoreau Group at an $11.75bn valuation, as part of which Bon Secours retained a minority shareholding.
Last year, Bain tried to buy the whole of Surgery Partners, valuing the group at a $6.7bn enterprise value, but the talks collapsed.
Bon Secours runs 47 hospitals across the US and Ireland, generating approximately $14bn in revenues last year.
Bon Secours and Surgery Partners did not immediately respond to requests for comment. Bain declined to comment.