Brentwood, Tenn.-based Surgery Partners is leaning into building de novo ASCs rather than acquiring existing facilities in 2026, according to its second-quarter earnings call.
As a result of the change in strategy, the company will miss its $200 million average annual M&A target, according to Eric Evans, Surgery Partners’ CEO.
Here are five things to know about Surgery Partners’ de novo growth this year, according to its second-quarter earnings call, transcribed by Investing.com.
1. Surgery Partners will fall short of its $200 million annual M&A target. Mr. Evans said “a significant focus this year has admittedly been on optimizing our existing portfolio, divesting assets that no longer align with our short-stay surgical strategic direction,” adding that “we will clearly not reach our $200 million average annual M&A investment target in 2026.”
2. De novo development is filling the growth gap. Surgery Partners has six de novo ASCs under construction and seven more in the pipeline, which Mr. Evans described as “anchored by high-quality health systems and physician groups in attractive markets.”
3. Those de novo projects skew toward musculoskeletal care. Mr. Evans said the de novo pipeline tends to be “highly MSK,” aligning new ground-up construction with the specialty driving much of the company’s same-facility growth. The company did not disclose specific cost or opening-timeline figures for the de novo projects on the call.
4. The pipeline isn’t gone, but it has been deprioritized. “We still have an active pipeline we’re managing. We feel good about our position in the industry,” Mr. Evans said, adding that the company expects to close additional acquisitions before year-end.
5. Portfolio optimization ate up the bandwidth. Mr. Evans tied the M&A slowdown directly to the company’s ongoing divestiture work, including the previously announced $795 million sale of its Idaho Falls, Idaho, hospital market to Intermountain Health.
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