What happened?
Shares of healthcare company Surgery Partners (NASDAQ: SGRY) jumped 12% in the morning session after the company and HealthSpan Partners announced an amended merger agreement increasing the buyout consideration to $25 per share in cash.
According to the companies' announcement, the upgraded deal follows the receipt of an unsolicited competing proposal and values Surgery Partners at an enterprise value of up to approximately $6.0 billion. The companies also noted that non-Bain Capital stockholders may receive up to an additional $1.61 per share in cash ticking fees at a 10% annual rate if the transaction closes after March 1, 2027. Furthermore, Surgery Partners stated that its board of directors unanimously recommended that stockholders vote to approve the revised merger.
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What is the market telling us
Surgery Partners’s shares are quite volatile and have had 18 moves greater than 5% over the last year. But moves this big are rare even for Surgery Partners and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 46.4% on the news that HealthSpan Partners, an affiliate of Bon Secours Mercy Health, agreed to acquire the company in an all-cash transaction valued at approximately $5.7 billion in enterprise value.
Under the definitive merger agreement, public shareholders will receive $23.50 in cash per share, representing a 49% premium over the previous session's $15.75 close, the company said in a press release. A filing confirmed that the deal is backed by committed debt financing without a financing condition and is expected to close in the first quarter of 2027, subject to antitrust clearance and shareholder approvals, alongside a company termination fee of approximately $109 million.
Surgery Partners is up 70.3% since the beginning of the year, and at $25.99 per share, it has set a new 52-week high. Despite the year-to-date gain, investors who bought $1,000 worth of Surgery Partners’s shares 5 years ago would now be looking at only $496.85.
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