Combination creates leading independent surgery
company with strong musculoskeletal programs
Surgery Partners, Inc. (NASDAQ:SGRY) ("Surgery Partners"), a
leading healthcare services company, and National Surgical
Healthcare (“NSH”), an owner and operator of surgical facilities in
partnership with local physicians, today announced that they have
entered into a definitive merger agreement under which Surgery
Partners will acquire NSH from Irving Place Capital for
approximately $760 million. Funding for Surgery Partners’
acquisition of NSH will be provided in part by Bain Capital Private
Equity, a leading global private investment firm, who as part of
the transaction is injecting capital in exchange for a preferred
security in the Company. In conjunction with this
transaction, Bain Capital Private Equity will acquire H.I.G.
Capital’s existing equity stake in Surgery Partners.
The transaction builds upon each company’s physician-centric
services model. It combines two best in class organizations,
creating a diversified inpatient and outpatient surgical provider
with a portfolio of 125 surgical facilities, 58 physician practice
locations and complementary ancillary services. The combined
business will be one of the leading independent surgical facilities
operators in the country, with a strong presence in musculoskeletal
programs, including orthopedics, pain and spine. The combined
company will operate facilities in 32 states with a network of over
5,000 physicians, creating an attractive, diversified surgical
provider that is well-positioned to be the partner of choice for
physicians and a valued provider for patients and payors.
“We are very excited about the acquisition of National Surgical
Healthcare and welcome our new partnership with Bain Capital
Private Equity,” said Mike Doyle, Chief Executive Officer of
Surgery Partners. “I would like to welcome the NSH team and
physicians. This transaction strengthens our market position
and will provide new opportunities to introduce ancillary services
to our expanded network of surgical facilities. NSH and
Surgery Partners share a commitment to high quality, cost effective
healthcare services. We are optimistic that this combination
will promote physician recruitment and new service line expansion
while generating solid growth, and we expect this transaction to be
accretive in 2018. We are thankful to have had the
opportunity to grow the Company with H.I.G. Capital over the past
seven years, and thank the entire H.I.G. team for their support of
our Company and management team along the way.”
"This transaction fits well with our efforts to deliver strong
clinical outcomes and high quality patient care,” said David Crane,
Chairman and Chief Executive Officer of NSH. “Together we believe
our physician-centric model will continue to draw interest and
deliver on its goals of providing quality surgical services and
superior facilities for patients, physicians and payors. We
are very appreciative of the support and partnership that NSH has
enjoyed from and with Irving Place Capital during their ownership
of the company. We also appreciate Bain Capital Private Equity’s
investment with the new combined company and look forward to the
next chapter for NSH with Surgery Partners.”
John Howard, Co-Managing Partner of IPC, said, “We have truly
enjoyed working with David and his talented team as they have
successfully executed on their strategy of building a leading
operator in the surgical facility space. We are incredibly grateful
for all of the hard work the team has put in during our ownership
period and we wish them continued success.”
“Surgery Partners and National Surgical Healthcare have both
demonstrated their ability to partner with physicians to deliver
great clinical outcomes for patients. The combined company
will create the market-leading platform for high-quality,
cost-efficient surgical care,” said Devin O’Reilly, a Managing
Director of Bain Capital Private Equity.
“Both companies have an impressive track record of growth – we
look forward to continuing to support management and our partner
physicians in the expansion of the platform,” added Chris Gordon, a
Managing Director of Bain Capital Private Equity.
Bain Capital Private Equity is a long-term investor and has a
history of successful investments across a broad range of
healthcare sectors including service providers, facilities, life
sciences, devices, and distribution. The firm’s experience
owning industry leading facilities-based healthcare businesses
includes HCA Healthcare, Acadia Healthcare, Air Medical and Grupo
Notre Dame Intermedica, among others.
The transaction is expected to close during 2017 and remains
subject to the receipt of required regulatory approvals and the
satisfaction of other customary closing conditions.
Jefferies LLC is serving as the exclusive financial advisor and
is providing committed financing for the transaction, Ropes &
Gray LLP is serving as legal counsel, and PwC LLP is acting as
accounting advisor to Surgery Partners and Bain Capital Private
Equity. Kirkland & Ellis is acting as counsel to Bain
Capital Private Equity. J.P. Morgan Securities LLC is acting
as financial advisor to NSH, and Weil, Gotshal & Manges LLP as
its legal advisor.
About Surgery PartnersHeadquartered in
Nashville, Tennessee, Surgery Partners is a leading healthcare
services company with a differentiated outpatient delivery model
focused on providing high quality, cost effective solutions for
surgical and related ancillary care in support of both patients and
physicians. Founded in 2004, Surgery Partners is one of the
largest and fastest growing surgical services businesses in the
country, with more than 150 locations in 29 states, including
ambulatory surgical facilities, surgical hospitals, a diagnostic
laboratory, multi-specialty physician practices and urgent care
facilities.
About National Surgical HealthcareNSH is
an innovative healthcare partner that
empowers physicians to thrive
in a changing marketplace. NSH owns and operates
21 surgical facilities, specializing in orthopedic surgery, spine
and back, pain management, and neurosurgery. For information
about NSH, visit the company's website at www.nshinc.com.
About Bain Capital Private Equity Bain Capital
Private Equity (www.baincapitalprivateequity.com) has partnered
closely with management teams to provide the strategic resources
that build great companies and help them thrive since our founding
in 1984. Our team of more than 220 investment professionals
creates value for our portfolio companies through our global
platform and depth of expertise in key vertical industries,
including industrials, consumer/retail, financial and business
services, healthcare, and technology, media and telecommunications.
In addition to private equity, Bain Capital invests across
asset classes including credit, public equity and venture capital,
and leverages the firm’s shared platform to capture opportunities
in strategic areas of focus.
About Irving Place CapitalSince its founding in
1997, Irving Place Capital has invested in over 60 portfolio
companies, primarily in the industrial, packaging, consumer and
retail industries. The firm focuses on making control or
entrepreneur-driven investments where it can apply its substantial
operating and strategic resources and expertise to enhance value.
Irving Place Capital has successfully executed a broad range of
transactions, including buyouts, recapitalizations, build-ups,
corporate divestitures, take-privates and distressed-to-control
situations. Irving Place Capital generally seeks to invest in
companies headquartered in North America or Western Europe. More
information about Irving Place Capital is available at
www.irvingplacecapital.com.
Contacts:
Surgery Partners, Inc.
Teresa Sparks, Chief Financial Officer
(615) 234-8940
IR@surgerypartners.com
For National Surgical Healthcare
Bryan S. Fisher, President and Chief Operating Officer
(312) 627-8427
bfisher@nshinc.com
For Bain Capital Private Equity
Alex Stanton/Charlyn Lusk
Stanton
(212) 780-0701 / (646) 502-3549
astanton@stantonprm.com / clusk@stantonprm.com
For Irving Place Capital
Alex Yankus
Brunswick Group
(212) 333-3810
ayankus@brunswickgroup.com
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