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Surgery Partners’ Latest Sale Could Be A Deleveraging Game Changer!

Surgery Partners has taken a significant step in its portfolio-optimisation strategy by agreeing to sell its ownership interests in Mountain View Hospital and Idaho Falls Community Hospital to Intermountain Health. The transaction values the two Idaho Falls facilities at approximately $1.15 billion, with roughly $795 million of consideration expected to go to Surgery Partners before debt, working-capital, transaction-cost and other closing adjustments. Intermountain is acquiring Surgery Partners’ interests rather than the entire company, while physician ownership in Mountain View Hospital will remain unchanged. The proposed sale fits management’s stated objective of reducing exposure to larger surgical hospitals that offer broader services than its core short-stay model. It could provide Surgery Partners with substantial liquidity, support debt reduction and allow additional investment in ambulatory surgery centres. However, the financial benefits will depend on final proceeds, the use of the cash and the earnings surrendered through the disposal.