Brentwood, Tenn.-based Surgery Partners completed the $797 million sale of its ownership interests in Idaho Falls Community Hospital and Mountain View Hospital to Salt Lake City-based Intermountain Health on Sept. 17, pushing the company further from the inpatient hospital business and deeper into ambulatory surgery.
The deal, which values the two Idaho Falls, Idaho, facilities at about $1.15 billion combined, gives Intermountain majority ownership of the 126-bed system while preserving its local brands, management and the existing physician ownership stake in Mountain View Hospital. The combined operations include more than 150 physicians and nine surgical specialties, along with oncology, emergency, ICU and neonatology services. Surgery Partners will use most of the $587 million in net proceeds to pay down debt, a move the company said will improve its leverage by 30 basis points.
For Surgery Partners, the sale is about more than one transaction. It’s about where the company has decided its future lies.
“With the completion of this important transaction, Surgery Partners enters a new chapter better positioned for long-term growth as a pure-play short-stay surgical provider,” CEO Eric Evans said in a Sept. 17 news release.
The Idaho Falls sale is the most significant step yet in a broader narrowing of Surgery Partners’ hospital footprint. Alongside the transaction, the company lowered its 2026 revenue guidance to a pro forma range of $2.6 billion to $2.67 billion, excluding the divested facilities, and outlined plans to shed neonatology, obstetrics, pediatrics and pharmacy services elsewhere in its portfolio while reducing its Medicaid payer mix by about 50%.
In a March 10 open letter to stockholders, New York-based Ortelius Advisors, led by managing member Peter DeSorcy, called on Surgery Partners to monetize all of its surgical hospitals to generate what it argued could be billions of dollars in asset sales, and to use the proceeds to repurchase stock and pay down debt. The firm also pushed for a board refresh and new management, pointing to a stock that had fallen 67% over five years and underperformed its benchmark by 108 percentage points.
The Idaho Falls sale fits a pattern Surgery Partners has followed for several years: paring capital-intensive hospital assets while funneling investment into ambulatory surgery centers, particularly in orthopedics and cardiology. The company opened eight de novo ASCs in 2024 and two more in 2025, and it now has nine facilities under construction and more than a dozen in additional development. It also walked away from a $3.2 billion buyout offer from Bain Capital last year, with Chairman Brent Turner citing confidence in the company’s joint-venture model, and it has kept building outpatient partnerships, including a joint venture with Dallas-based Baylor Scott & White Health and this year’s acquisition of Preferred Vascular Group, a network of office-based labs that perform dialysis access procedures.
Surgery Partners did not name additional hospitals under review for sale. But with the Idaho Falls transaction closed, Mr. Evans’ description of the company as a “pure-play short-stay surgical provider” suggests the hospital side of its business may keep shrinking.
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