Surgery Partners plans to spend $250M+ on acquisitions this year

Surgery Partners spent just under $250 million to acquire ASCs last year, and is planning for more in 2023.

"Our team is currently managing a robust pipeline of potential targets in excess of $250 million," said Wayne DeVeydt, executive chair of Surgery Partners in a March 1 earnings call transcribed by Seeking Alpha, later adding the company expects to generate more than $140 million in free cash flow this year and aims to increase free cash flow to $200 million by 2025.

The company started 2023 with $820 million in liquidity and has an eye on long-term growth.

"We have high confidence in the long-term growth prospects of Surgery Partners," said Mr. DeVeydt. "The management team continues to demonstrate their ability to successfully navigate the challenges of our current macroeconomic environment, as it executes on organic and inorganic growth strategies to provide significant year-over-year growth."

Same facility net revenue was up nearly 11 percent in the fourth quarter of 2023 and case volume grew 4.3 percent year over year.

Surgery Partners also added 150 new physicians in the fourth quarter and 575 new surgeons began using its facilities last year. The new cohort's average net revenue per physician is 53 percent more than the new physicians who joined in 2021.

Orthopedic cases were up 13 percent at Surgery Partners centers in the fourth quarter, hitting 28,000 cases, and the company anticipates continued growth.

"With an increase in the share of orthopedic and cardiac procedures moving into lower cost, high quality, short-stay surgical facilities, we are considering all options to capture our fair share, including sourcing and managing a robust M&A pipeline, as well as investments in robotic equipment, expanding existing facilities and leveraging our partnerships with ValueHealth and select health systems, as well as the ongoing development of de novo facilities," said Eric Evans, CEO of Surgery Partners.

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