Dive Brief:
- Intermountain Health is fully acquiring two hospitals and more than 60 clinics that it jointly owns in Idaho from Surgery Partners, in a deal valued at almost $1.2 billion.
- Along with local physicians, the nonprofit regional health system and the surgical facility operator have co-owned the network since 2023. But Surgery Partners plans to transfer its ownership interests to Intermountain, which is expected to net Surgery Partners just shy of $800 million, according to the deal announced Friday.
- The transaction is proposed and may not be finalized, the companies said. The deal needs to meet closing conditions, including approval from the governing board of one of the hospitals in the network, but could close in the coming months if all goes smoothly.
Dive Insight:
Under the deal, Mountain View Hospital, Idaho Falls Community Hospital and the hospitals’ affiliated clinics in southeast Idaho will transfer fully to Salt Lake City-based Intermountain.
The facilities’ leadership, jobs and compensation should remain unchanged as part of the deal, according to the release. Intermountain and Surgery Partners need Mountain View Hospital’s physician member and physician governing board to OK the deal for it to move forward.
“Unless and until these approvals are obtained, there is no assurance regarding the completion of the transaction,” Surgery Partners said in its release.
Last year, the two hospitals collectively generated around $740 million in revenue, and about $100 million in earnings before interest, taxes and other adjustments, according to data from the American Hospital Association’s hospital directory cited by TD Cowen analyst Ryan Langston.
The facilities could bolster Intermountain’s portfolio as the regional nonprofit, which owns 34 hospitals and about 400 clinics in six states, continues to embark on capital expenditures and deals following stable revenue and income growth last year.
Intermountain recently expanded services in Nevada and eastern Montana, and notched a deal with fellow nonprofit AdventHealth to jointly operate facilities in Denver.
As for Surgery Partners, the Brentwood, Tennessee-based company said it expects to receive “substantial” cash proceeds upon the deal’s close. Surgery Partners said the final amount is subject to adjustment so it’s unable to ballpark final cash proceeds at this time.
Management framed the deal as a significant milestone in its ongoing strategy to sell larger and more capital-intensive hospital assets that don’t fit into its more outpatient-focused model.
Surgery Partners, which operates surgical facilities, multi-specialty physician practices and anesthesia services in 30 states, has been increasingly focused on ambulatory surgery centers and has a number of de novo builds in the pipeline.
The transaction “represents the largest step forward in our portfolio optimization strategy to date, simplifying our go forward operations, and positioning us to accelerate momentum in the rapidly growing, high-value ambulatory surgery center space,” Surgery Partners CEO Eric Evans said in a statement.
