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HealthSpan paid **14.8x** EBITDA for Surgery Partners, validating that ambulatory platforms with scale and commercial payer relationships now command hospital-grade multiples.
$23.07
on Monday
46%
after HealthSpan Partners agreed to acquire the Nashville-based operator…
180
surgical facilities and
120
ancillary care sites for
Surgery Partners closed at $23.07 on Monday, up 46%, after HealthSpan Partners agreed to acquire the Nashville-based operator of 180 surgical facilities and 120 ancillary care sites for $5.7 billion in enterprise value. The transaction puts Surgery Partners at roughly 2.1x trailing twelve-month revenue and 14.8x estimated 2025 EBITDA, a premium to comparable ambulatory surgical center trades over the past eighteen months.
HealthSpan Partners is a newly formed platform backed by Ares Management, General Atlantic, and Bain Capital. The consortium structured the deal as $28 per share in cash, a 48% premium to Surgery Partners' thirty-day volume-weighted average price. Surgery Partners generated $2.7 billion in revenue for the twelve months ending September 2024, with roughly 63% derived from musculoskeletal and gastroenterology procedures. The company operates in 36 states, with concentration in Texas, Tennessee, and Florida markets where payer mix skews commercial and reimbursement remains above the national median.
The valuation reflects three structural shifts in outpatient-care economics. First, commercial payers now steer 42% of elective orthopedic and ophthalmology volume to ambulatory settings, up from 31% in 2019, according to CMS data. Second, hospitals are shedding non-acute capacity: 89 health systems divested or joint-ventured surgical centers in 2024, the highest count since 2017. Third, Medicare's site-neutral payment expansions—effective January 2025 for 14 additional procedure codes—widens the reimbursement gap between hospital outpatient departments and ASCs by an average of 38%. HealthSpan is paying for a platform positioned at the center of all three trends.
The multiple Surgery Partners commands also signals the end of the 2020-2023 discount period, when ambulatory platforms traded at 1.4x to 1.7x revenue due to post-pandemic utilization uncertainty and elevated labor costs. Surgery Partners' same-facility case volume returned to 102% of 2019 levels by Q3 2024, and the company posted 340 basis points of EBITDA margin expansion year-over-year through contract labor normalization and supply-chain renegotiation. HealthSpan is effectively underwriting continued margin improvement and mid-single-digit organic case growth, a bet that only pencils if commercial payer steering and hospital divestiture persist through 2027.
Allocators should track three near-term developments. First, whether Envision Healthcare or SCA Health—the two largest remaining independent ASC platforms—enter sale processes within 90 days; both have been approached by financial sponsors in the past six months. Second, how quickly HealthSpan moves to bolt on additional physician-partnership deals in high-acuity specialties like spine and cardiology, where reimbursement remains hospital-biased but migration is accelerating. Third, whether Medicare finalizes its proposed 2026 ASC fee schedule in late April; if the agency adds 22 more codes to the site-neutral list, Surgery Partners' Medicare case mix becomes 12% more profitable overnight.
The transaction is expected to close in Q2 2025, subject to shareholder and regulatory approval. Surgery Partners will report Q4 earnings on February 25. HealthSpan has not disclosed whether it will retain Surgery Partners' existing management team or integrate the platform into a larger ambulatory roll-up structure.
Branded by POPS4 · proof in 60 seconds
For the principal
If your office holds any hospital REIT exposure, model the revenue impact of continued ASC market-share migration through 2027.
For the operator
Watch SCA Health and Envision for sale processes within ninety days; this multiple resets the bid floor for ambulatory platforms.
For the house
We are evaluating minority stakes in regional ASC networks where payer contracts mirror Surgery Partners' commercial mix and margin profile.
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