Bon Secours agrees to buy Surgery Partners for about $5.7 billion

Bon Secours Mercy Health said Monday that it has agreed to buy Surgery Partners for about $5.7 billion, in a deal that would broaden the nonprofit health system’s outpatient reach across the United States.

Deal terms and premium

Under the agreement, Bon Secours would pay $23.50 for each Surgery Partners share, according to the companies. That price represents a premium of about 49.2% over the stock’s prior close.

The transaction was announced Monday, according to the source.

• Buyer: Bon Secours Mercy Health
• Target: Surgery Partners
• Valuation: About $5.7 billion
• Offer price: $23.50 per share
• Premium: About 49.2%

Why Bon Secours wants the company

Bon Secours said the acquisition would expand its outpatient services, which can help patients receive care outside of hospitals. The source says that makes the deal part of a broader push by large health systems to build out outpatient networks.

The transaction comes after Ascension bought Amsurg for $3.9 billion earlier in the year, according to the source. That deal is cited as a sign that major hospital systems are seeking more scale in outpatient care.

What Surgery Partners brings

Surgery Partners says it has more than 5,000 physicians working across more than 300 facilities in 30 states. That footprint gives Bon Secours a much larger outpatient platform than it has today, based on the companies’ statements.

The source also notes that the acquisition follows an earlier go-private offer involving Surgery Partners. About 18 months ago, the company rejected a higher bid from Bain Capital, which owns a 38.5% stake and is expected to keep that holding.

Why the deal matters for the market

According to the source, the purchase could create new exit opportunities for sponsors that own scaled doctor group businesses, especially in cases where there have not been many strategic buyers. It also suggests that large hospital systems may continue competing to add outpatient assets as they try to keep pace with one another.

For ordinary patients, the main implication is that more medical care could be shifted away from hospitals and into outpatient settings if systems like Bon Secours keep expanding this way.

Source: Dan Primack, Claire Rychlewski