On June 17, Brentwood, Tenn.-based Surgery Partners, one of the country’s largest ASC operators, rejected a buyout bid from Bain Capital, its largest shareholder, choosing to remain independent.
Bain Capital, which already owns 39% of Surgery Partners, submitted a bid reportedly valuing the company at $3.2 billion. But the company’s independent board rebuffed the offer, citing strong financials, market position and growth potential.
“Surgery Partners offers a unique, scaled platform in the high-growth outpatient surgical care market that leverages its proven joint venture model, strong M&A track record and favorable demographic and policy tailwinds,” Brent Turner, chairman of the independent committee, said in a June 17 release.
Many ASC leaders believe Bain saw limited future growth, while Surgery Partners sees more long-term opportunity.
“I have done this dance a hundred times,” Shakeel Ahmed, MD, CEO of Atlas Surgical Group, told Becker’s. “Surgery Partners’ decision to walk away from Bain speaks volumes about where leadership sees long-term value creation. Our industry is still early in its maturity curve. We’re witnessing unprecedented migration of complex surgeries to outpatient settings, bundled payment models gaining traction, and increasing physician alignment. While private equity may see a ceiling, operators like Surgery Partners see a runway.”
Dr. Ahmed, a longtime critic of private equity’s role in ASCs, framed the move as a smart play by operators who believe they’re only at the beginning of a lucrative run.
“The ASC business is far too lucrative to bring in non-surgeon partners at this juncture in time,” he said.
But not all observers see the rejection as a hard line against private equity. Andrew Lovewell, CEO of Columbia (Mo.) Orthopaedic Group, said it may just be a matter of timing.
“Surgery Partners rejecting Bain’s bid is not a surprise,” Mr. Lovewell said. “That tells us that the offer was not high enough to account for future earnings that Surgery Partners is banking on. I don’t think this means Surgery Partners isn’t still for sale, it just means the bid now wasn’t high enough.”
Some surgeons, however, interpret the rejection as a cultural stance, not just a financial one.
“Surgeons must believe that the rejection actually reflects the growing surgeon concern about corporate control over clinical priorities and that Surgery Partners clearly recognizes this,” Alejandro Badia, MD, founder and CMO of Badia Hand to Shoulder Center, told Becker’s. “Nearly two-thirds of ASCs are 100% physician-owned… It’s the doctors who most care about the ‘business’ and patients, not employees of a behemoth company.”
The backlash against private equity control isn’t new, but it’s intensifying as PE-backed consolidators play a larger role in reshaping the ASC landscape. According to Benjamin Stein, MD, CEO of Capital Surgical Solutions, the structural limits of private equity may have influenced Surgery Partners’ move.
“Their ability to influence payer dynamics, manage population risk, or embed into a broader care continuum is inherently more limited,” Dr. Stein said. “Bain has had a substantial minority position in Surgery Partners to date, but I would imagine there is some hesitancy on this full acquisition moving forward as the downstream upside is not as clear.”
Surgery Partners’ move may not mark a permanent rejection of consolidation, but it does suggest a strategic pause, at a moment when outpatient surgery is becoming a dominant force in healthcare delivery.
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