Surgery Partners renews M&A push with plans to raise $115M — 7 insights

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Brentwood, Tenn.-based Surgery Partners plans to raise $115 million in incremental term loans to fund acquisition activity, according to an Oct. 11 SEC filing.

Here's what you should know:

1. Surgery Partners will primarily use the funds to finance future acquisitions. The company expects to spend $113 million on six "near-term" transactions, as well as new builds and currently owned facilities. Several letters of intent have been signed, the filing says.

2. The funds will also help offset spending on transactions in the first half of the year, according to the filing. In the past year, Surgery Partners has spent about $75 million to acquire four facilities in Louisiana, Nebraska, California and Texas.

3. The pipeline transactions could add $20.3 million annually to the company's EBITDA, if completed.

4. Executives plan to close the $115 million financing Oct. 23. The loans would mature Aug. 31, 2024.

5. Surgery Partners also released projected preliminary results for the third-quarter, which ended Sept. 30:

  • Same-store revenue growth of 9 percent to 11 percent, compared to 3 percent in the second quarter
  • Surgical case volumes: 126,000 cases to 128,000 cases
  • Revenues: $435 million to $445 million
  • Adjusted EBITDA: $57 million to $60 million
  • Credit Agreement EBITDA: $259 million to $262 million

6. In March 2017, then-CEO Mike Doyle said the company would cut back on mergers and acquisitions after buying Symbion for nearly $800 million, Nashville Post reports. Wayne DeVeydt, who took over as CEO earlier this year, has renewed the company's acquisition efforts.

7. Surgery Partners operates 106 surgery centers and 18 surgical hospitals in 32 states, with 4,000 affiliated physicians.

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