HealthSpan to Acquire Surgery Partners at Nearly $5.7 Billion Enterprise Value
Key Facts
HealthSpan Partners and Surgery Partners announced a definitive agreement on October 26 under which HealthSpan, a subsidiary of Bon Secours Mercy Health, will acquire the surgical care company in an all-cash deal with an enterprise value of nearly $5.7 billion, according to the companies’ joint statement. The agreement provides for $23.50 in cash per share for Surgery Partners shareholders, excluding Bain Capital affiliates. Those affiliates will convert their shares into equity in the acquiring entity, remaining an important partner after the deal closes. Enterprise value estimates the value of the transaction, while the announced cash consideration determines what shareholders covered by the offer receive per share. The agreement was signed on October 23, three days before its official announcement.
Bain Capital, Surgery Partners’ largest shareholder, owns about 39% of the outstanding shares and has agreed to vote in favor of the deal under a support and voting agreement, while rolling over its stake at closing. As a result, the $23.50 cash consideration does not apply to its affiliates’ shares, which will convert into equity in the acquiring company. Surgery Partners CEO Eric Evans said the deal “provides an attractive cash premium to our shareholders” and delivers long-term benefits for patients, physicians and stakeholders. Axios estimated the offer premium at 49.2% above the previous Friday’s closing price. The agreement followed EL7’s report on October 25 that advanced talks were underway over a potential deal then valued at about $6 billion.
Surgery Partners will add more than 200 locations in 30 states and about 5,000 affiliated physicians to HealthSpan, according to the announcement. Its platform includes ambulatory surgery centers, surgical hospitals and physician partnerships, expanding HealthSpan’s surgical care operations. In its annual report, the company said it owned or operated 176 surgical facilities in 30 states as of December 31, 2025. The deal announcement does not say the locations will be integrated into the Bon Secours network; it identifies them as an addition to HealthSpan Partners. Bon Secours Mercy Health CEO John M. Starcher Jr. said the deal would allow the company to “enhance access to lower-cost care and support more patients and communities,” drawing on Surgery Partners’ network and physician relationships.
Surgery Partners’ revenue in 2025 was about $3.3 billion, up 6.2% from $3.1 billion in 2024, while same-facility revenue rose 4.9%, according to its annual filing. The company reported a 3.4% increase in same-facility case volume and a 1.4% rise in revenue per case during the year. Adjusted earnings before interest, taxes, depreciation and amortization rose 3.5% to $526.2 million, compared with $508.2 million in 2024. Meanwhile, its net loss attributable to the company narrowed to $77.9 million from $168.1 million the previous year. The company linked its long-term growth opportunities to continued demand for outpatient surgery services, citing the market’s fragmentation.
Surgery Partners shares rose 45.9% in morning trading on the day the agreement was announced, according to Investing.com, while Axios put the offer premium at 49.2% above the previous Friday’s close. EL7 data showed the stock closed at $15.75 on October 23, before the announcement, then at $23.25 on October 26 and $23.36 on October 27. On October 28, the stock closed at $23.24. These prices show that the October 28 close came after the official announcement, not before it. Surgery Partners is expected to become a private company, and its common shares are expected to cease trading on Nasdaq when the deal closes.
The companies said Surgery Partners’ operations, name, brand and headquarters are expected to remain in place after closing, and that it is expected to remain a nonreligious institution and not be classified as an entity affiliated with a Catholic ministry. HealthSpan intends to fund the acquisition with available cash and new debt, and has obtained financing commitments. The company’s filing with the U.S. Securities and Exchange Commission states that completion of the merger is not conditioned on obtaining financing. The special committee, composed entirely of independent and disinterested members, unanimously recommended the deal, which was then approved by Surgery Partners’ board. The company said the transaction is expected to close in the first quarter of 2027, subject to shareholder approval, regulatory approvals and the satisfaction of customary conditions.
The agreement may be terminated if the deal has not closed by July 23, 2027, with the date automatically extendable in certain circumstances related to satisfying closing conditions. It also provides for a termination fee of $108,986,842 that Surgery Partners may pay in specified contractual circumstances, including termination to enter into a superior offer, with additional terms for certain failure-to-close or shareholder-approval scenarios. Shareholder and regulatory approvals remain among the stated conditions for completing the deal. This follows the board’s approval and the special committee’s unanimous recommendation. Closing is expected in the first quarter of 2027, while the agreement sets July 23, 2027 as the outside date for completion before any permitted extension applies.