Combination creates leading independent surgery company with strong musculoskeletal programs
Transaction expected to be accretive in 2018
Bain Capital Private Equity acquiring H.I.G. Capital’s stake in Surgery Partners and providing capital for
the acquisition
NASHVILLE, Tenn., May 10, 2017 (GLOBE NEWSWIRE) -- Surgery Partners, Inc. (NASDAQ:SGRY) ("Surgery Partners"), a leading
healthcare services company, and National Surgical Healthcare (“NSH”), an owner and operator of surgical facilities in partnership
with local physicians, today announced that they have entered into a definitive merger agreement under which Surgery Partners will
acquire NSH from Irving Place Capital for approximately $760 million. Funding for Surgery Partners’ acquisition of NSH will
be provided in part by Bain Capital Private Equity, a leading global private investment firm, who as part of the transaction is
injecting capital in exchange for a preferred security in the Company. In conjunction with this transaction, Bain Capital
Private Equity will acquire H.I.G. Capital’s existing equity stake in Surgery Partners.
The transaction builds upon each company’s physician-centric services model. It combines two best in class organizations,
creating a diversified inpatient and outpatient surgical provider with a portfolio of 125 surgical facilities, 58 physician
practice locations and complementary ancillary services. The combined business will be one of the leading independent
surgical facilities operators in the country, with a strong presence in musculoskeletal programs, including orthopedics, pain and
spine. The combined company will operate facilities in 32 states with a network of over 5,000 physicians, creating an
attractive, diversified surgical provider that is well-positioned to be the partner of choice for physicians and a valued provider
for patients and payors.
“We are very excited about the acquisition of National Surgical Healthcare and welcome our new partnership with Bain Capital
Private Equity,” said Mike Doyle, Chief Executive Officer of Surgery Partners. “I would like to welcome the NSH team and
physicians. This transaction strengthens our market position and will provide new opportunities to introduce ancillary
services to our expanded network of surgical facilities. NSH and Surgery Partners share a commitment to high quality, cost
effective healthcare services. We are optimistic that this combination will promote physician recruitment and new service
line expansion while generating solid growth, and we expect this transaction to be accretive in 2018. We are thankful to have
had the opportunity to grow the Company with H.I.G. Capital over the past seven years, and thank the entire H.I.G. team for their
support of our Company and management team along the way.”
"This transaction fits well with our efforts to deliver strong clinical outcomes and high quality patient care,” said David
Crane, Chairman and Chief Executive Officer of NSH. “Together we believe our physician-centric model will continue to draw interest
and deliver on its goals of providing quality surgical services and superior facilities for patients, physicians and payors.
We are very appreciative of the support and partnership that NSH has enjoyed from and with Irving Place Capital during their
ownership of the company. We also appreciate Bain Capital Private Equity’s investment with the new combined company and look
forward to the next chapter for NSH with Surgery Partners.”
John Howard, Co-Managing Partner of IPC, said, “We have truly enjoyed working with David and his talented team as they have
successfully executed on their strategy of building a leading operator in the surgical facility space. We are incredibly grateful
for all of the hard work the team has put in during our ownership period and we wish them continued success.”
“Surgery Partners and National Surgical Healthcare have both demonstrated their ability to partner with physicians to deliver
great clinical outcomes for patients. The combined company will create the market-leading platform for high-quality,
cost-efficient surgical care,” said Devin O’Reilly, a Managing Director of Bain Capital Private Equity.
“Both companies have an impressive track record of growth – we look forward to continuing to support management and our partner
physicians in the expansion of the platform,” added Chris Gordon, a Managing Director of Bain Capital Private Equity.
Bain Capital Private Equity is a long-term investor and has a history of successful investments across a broad range of
healthcare sectors including service providers, facilities, life sciences, devices, and distribution. The firm’s experience
owning industry leading facilities-based healthcare businesses includes HCA Healthcare, Acadia Healthcare, Air Medical and Grupo
Notre Dame Intermedica, among others.
The transaction is expected to close during 2017 and remains subject to the receipt of required regulatory approvals and the
satisfaction of other customary closing conditions.
Jefferies LLC is serving as the exclusive financial advisor and is providing committed financing for the transaction, Ropes &
Gray LLP is serving as legal counsel, and PwC LLP is acting as accounting advisor to Surgery Partners and Bain Capital Private
Equity. Kirkland & Ellis is acting as counsel to Bain Capital Private Equity. J.P. Morgan Securities LLC is acting as
financial advisor to NSH, and Weil, Gotshal & Manges LLP as its legal advisor.
About Surgery Partners
Headquartered in Nashville, Tennessee, Surgery Partners is a leading healthcare services company with a differentiated outpatient
delivery model focused on providing high quality, cost effective solutions for surgical and related ancillary care in support of
both patients and physicians. Founded in 2004, Surgery Partners is one of the largest and fastest growing surgical services
businesses in the country, with more than 150 locations in 29 states, including ambulatory surgical facilities, surgical hospitals,
a diagnostic laboratory, multi-specialty physician practices and urgent care facilities.
About National Surgical Healthcare
NSH is an innovative healthcare partner that empowers physicians to thrive in
a changing marketplace. NSH owns and operates 21 surgical facilities, specializing in orthopedic surgery, spine and
back, pain management, and neurosurgery. For information about NSH, visit the company's website at www.nshinc.com.
About Bain Capital Private Equity
Bain Capital Private Equity (www.baincapitalprivateequity.com) has partnered closely with management teams to provide the
strategic resources that build great companies and help them thrive since our founding in 1984. Our team of more than 220
investment professionals creates value for our portfolio companies through our global platform and depth of expertise in key
vertical industries, including industrials, consumer/retail, financial and business services, healthcare, and technology, media and
telecommunications. In addition to private equity, Bain Capital invests across asset classes including credit, public equity
and venture capital, and leverages the firm’s shared platform to capture opportunities in strategic areas of focus.
About Irving Place Capital
Since its founding in 1997, Irving Place Capital has invested in over 60 portfolio companies, primarily in the industrial,
packaging, consumer and retail industries. The firm focuses on making control or entrepreneur-driven investments where it can apply
its substantial operating and strategic resources and expertise to enhance value. Irving Place Capital has successfully executed a
broad range of transactions, including buyouts, recapitalizations, build-ups, corporate divestitures, take-privates and
distressed-to-control situations. Irving Place Capital generally seeks to invest in companies headquartered in North America or
Western Europe. More information about Irving Place Capital is available at www.irvingplacecapital.com.
Contacts: Surgery Partners, Inc. Teresa Sparks, Chief Financial Officer (615) 234-8940 IR@surgerypartners.com For National Surgical Healthcare Bryan S. Fisher, President and Chief Operating Officer (312) 627-8427 bfisher@nshinc.com For Bain Capital Private Equity Alex Stanton/Charlyn Lusk Stanton (212) 780-0701 / (646) 502-3549 astanton@stantonprm.com / clusk@stantonprm.com For Irving Place Capital Alex Yankus Brunswick Group (212) 333-3810 ayankus@brunswickgroup.com
