Brentwood, Tenn.-based Surgery Partners is leaning heavily on acquisitions and de novo development to accelerate its ASC growth, executives shared during a May 13 earnings call transcribed by Seeking Alpha.
Here are five key takeaways from the company’s growth strategy:
1. Strategic acquisitions remain a priority. So far in 2025, the company has invested $55 million to acquire five facilities at an effective multiple of under 8x adjusted EBITDA, according to CEO Eric Evans. These deals are intended to drive immediate earnings growth and expand long-term value.
2. A cooldown in M&A-related costs is expected. Mr. Evans acknowledged that 2024 was an unusually busy and expensive year for acquisitions, but he said transaction and integration costs are expected to decline significantly in the second half of 2025, potentially boosting margins and profitability.
3. De novo development is accelerating. Surgery Partners has opened eight new facilities in 2024, bringing the total to 20 de novo sites since 2022. The company currently has 10 more under construction, with what Mr. Evans described as “a robust pipeline of future de novos.”
4. Annual growth targets remain ambitious. Surgery Partners plans to continue pursuing double-digit annual growth, allocating around $200 million per year toward acquisitions and de novo development. The company views these investments as immediately accretive to earnings and cash flow-positive, particularly in orthopedics and musculoskeletal services.
5. Margins are expected to improve. While executives cited short-term margin pressure due to business mix, they emphasized confidence in margin expansion throughout 2025, driven by volume growth, operational efficiencies and procurement initiatives.
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