Story Stocks®
Updated: 17-Jun-25 15:40 ET
Surgery Partners heads lower after failing to reach a buyout deal with Bain Capital (SGRY)
- Surgery Partners (SGRY -12%) is under pressure today after announcing it had concluded buyout discussions with Bain Capital without a deal being agreed to.
- Recall that in January, Bain Capital approached SGRY with a proposal to buy the company for $25.75 per share. Bain Capital is already a major shareholder and sought to acquire the remaining shares in SGRY it does not already own, but the two sides could not reach a deal.
- This operator of surgery centers, where patients can go for procedures outside of a hospital setting, ultimately determined that its prospects were better as an independent publicly traded company. SGRY cited its strong Q1 performance and noted that it's benefitting from favorable surgical trends and a bullish outlook on the regulatory landscape.
- We had thought that possible cuts in Medicaid might spur SGRY to make a deal. However, on its Q1 call last month, SGRY downplayed concerns about possible funding changes in Medicaid and exchange-based reimbursement programs as part of the currently debated tax bill. SGRY noted that its exposure to these payer groups is less than 5% of revenue, and it does not consider prospective changes to either program as a risk to its short or long-term growth prospects.
- Overall, SGRY sounded pretty confident about its ability to continue on its own as it reaffirmed its FY25 guidance this morning.
- Also, the $25.75 price tag did not offer much of a premium, even from where it was trading in late January. We were a little surprised that Bain Capital did not counter with a higher bid. Perhaps the fact that Bain did not do that is adding to today's slide in the share price.
