Key Takeaways
- Surgery Partners stock jumped 46% after a report that Bon Secours Mercy Health is in late-stage talks to buy a majority stake at about $20 a share, a deal worth roughly $6 billion including debt.
- The reported price looks like a fair exit for the business as it stands today, even though it’s far below where the stock traded in 2022.
- The $20 price is above analysts’ $19 consensus target and 27% above Friday’s close.
- No deal has been announced yet, and Bain walked away from its own buyout last year, so the thing to watch is whether a deal actually gets signed.
Surgery Partners (SGRY) soared 46%(!) this morning on a report that it may finally have a buyer.
On Sunday, the Financial Times reported that Bon Secours Mercy Health, one of the largest nonprofit health systems in the US, is in late-stage talks to buy a majority stake in Surgery Partners at about $20 a share. That’s 27% above Friday’s close.
TIKR tracks 12 analysts on Surgery Partners. How many say “Buy”?
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What exactly happened
Here’s what was reportedly agreed:
- The deal values Surgery Partners at roughly $6 billion, including debt.
- Bain Capital has been a minority holder since 2017. It would keep its stake of almost 40% in the take-private deal.
- The deal could be announced as early as today.
- It would end more than a year of on-and-off sale efforts. Last year Bain tried to buy the whole company at a $6.7 billion enterprise value, then walked away.
Most of that $6 billion isn’t for the stock. Even after today’s jump, the shares are worth only about $2 billion. The rest is debt, which grew from $2.97 billion in fiscal 2022 to $4.04 billion in fiscal 2025…
Hospitals want the surgery centers
Bon Secours runs 47 hospitals across the US and Ireland and brought in about $14 billion of revenue last year. Surgery Partners’ 176 surgery centers and hospitals across 30 states would greatly speed up its move into outpatient care.
Other systems are making the same move. Earlier this year, Ascension, another Catholic nonprofit, agreed to buy Amsurg, which runs a similar business, for $3.9 billion. As more procedures leave the hospital, nonprofit systems seem to want to own the surgery centers they’d otherwise be competing with.
$20 is a fair price for today’s business
Analysts weren’t expecting much more. Their consensus price target has dropped from $61.75 in October 2021 to $18.82 today…
So $20 is already above the Street’s average, and only the highest target, $24, is meaningfully above it. On earnings, the price comes to about 77x forward estimates, so Bon Secours would be paying up.
Shareholders who bought near the 2022 highs will hate this price, and it’s below what Bain offered last year. Still, given where estimates and targets are now, I think $20 is a fair exit.
Of course, nothing is signed yet, and Bain has already walked away once. With the stock now just below $20, there’s very little upside left if the deal closes, and a lot of downside if the talks fall apart again.
So what is Surgery Partners stock actually worth if the deal doesn’t go through?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Surgery Partners could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
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Disclaimer:
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