Key Takeaways
- • Surgery Partners (NASDAQ: SGRY) amended its merger agreement with HealthSpan Partners, raising the cash consideration to $25.00 per share, an enterprise value of up to approximately $6.0 billion.
- • Surgery Partners stockholders other than Bain Capital affiliates may receive up to an additional $1.61 per share in Ticking Fees if the merger closes after March 1, 2027, for maximum consideration of $26.61 per share at the October 23, 2027 outside date.
- • The Special Committee and Board concluded that a competing unsolicited proposal of $28.00 per share from a third party did not constitute a Superior Proposal, citing longer expected closing timing, regulatory complexity, and missing contractual protections.
- • Bain Capital, the largest shareholder with approximately 39% of outstanding shares, will receive no merger consideration for its shares and will roll them into the acquiring entity, and it remains bound by a voting and support agreement.
- • The transaction is still expected to close in the first quarter of 2027, subject to Surgery Partners stockholder approval, regulatory approvals, and customary closing conditions, with HealthSpan financing through cash on hand and committed new debt.
Summary
Surgery Partners, Inc. and HealthSpan Partners, a contractual affiliate and supporting organization of Bon Secours Mercy Health (BSMH), announced an amendment to their previously announced merger agreement on November 9, 2026. The amendment followed Surgery Partners' receipt of an unsolicited competing proposal from a third party. Under the amended terms, the merger consideration increases to $25.00 per share in cash, representing an enterprise value of up to approximately $6.0 billion. The amendment also introduces a Ticking Fee: if the requisite Company stockholder approval has been obtained but the merger has not closed by March 1, 2027, eligible stockholders receive additional monthly cash payments at a rate equal to 10% per annum on the $25.00 merger consideration, paid in equal monthly installments in arrears. Per the company's release, this could total up to $1.61 per share, for maximum consideration of $26.61 per share if the merger is consummated on the October 23, 2027 outside date.
The Special Committee, composed entirely of independent and disinterested directors, evaluated the Amended HealthSpan Proposal against an unsolicited non-binding proposal received November 3, 2026 and updated November 8, 2026, under which a third party offered $28.00 per share in cash for all outstanding shares. According to the company, the Special Committee assessed that the third-party proposal would take materially longer to close or might not close at all, reducing its value to stockholders; that it carried greater regulatory risk and complexity than the HealthSpan transaction; and that it did not provide contractual protections the committee sought. After consulting its financial and legal advisors, the Special Committee unanimously determined the third-party proposal was not a Superior Proposal under the HealthSpan merger agreement and unanimously recommended the amendment, which the Board subsequently approved. The Board reaffirmed its recommendation that stockholders approve the merger at the special meeting.
Chief Executive Eric Evans said the transaction "provides exceptional value for our stockholders, along with regulatory certainty and a closing expected in the near term." Bain Capital, which collectively owns approximately 39% of outstanding shares, previously agreed under a voting and support agreement to vote its shares in favor of the merger, and that agreement remains in place. Bain affiliates will forgo consideration, including the Ticking Fee, and will roll their shares into equity of the acquiring entity, remaining a significant partner in Surgery Partners following closing.
The transaction remains expected to close in the first quarter of 2027, subject to Surgery Partners stockholder approval, regulatory approvals, and other customary conditions. HealthSpan intends to fund the acquisition through cash on hand and new debt for which commitments have been secured. Centerview Partners is lead financial advisor to Surgery Partners, with Leerink Partners also advising; Moelis & Company advises the Special Committee; and Jefferies LLC is exclusive financial advisor to HealthSpan and provided committed financing as sole initial underwriter. Surgery Partners, headquartered in Brentwood, Tennessee, operates more than 200 locations across 30 states. The company will file a proxy statement and Schedule 13E-3 with the SEC.
The Special Committee, composed entirely of independent and disinterested directors, evaluated the Amended HealthSpan Proposal against an unsolicited non-binding proposal received November 3, 2026 and updated November 8, 2026, under which a third party offered $28.00 per share in cash for all outstanding shares. According to the company, the Special Committee assessed that the third-party proposal would take materially longer to close or might not close at all, reducing its value to stockholders; that it carried greater regulatory risk and complexity than the HealthSpan transaction; and that it did not provide contractual protections the committee sought. After consulting its financial and legal advisors, the Special Committee unanimously determined the third-party proposal was not a Superior Proposal under the HealthSpan merger agreement and unanimously recommended the amendment, which the Board subsequently approved. The Board reaffirmed its recommendation that stockholders approve the merger at the special meeting.
Chief Executive Eric Evans said the transaction "provides exceptional value for our stockholders, along with regulatory certainty and a closing expected in the near term." Bain Capital, which collectively owns approximately 39% of outstanding shares, previously agreed under a voting and support agreement to vote its shares in favor of the merger, and that agreement remains in place. Bain affiliates will forgo consideration, including the Ticking Fee, and will roll their shares into equity of the acquiring entity, remaining a significant partner in Surgery Partners following closing.
The transaction remains expected to close in the first quarter of 2027, subject to Surgery Partners stockholder approval, regulatory approvals, and other customary conditions. HealthSpan intends to fund the acquisition through cash on hand and new debt for which commitments have been secured. Centerview Partners is lead financial advisor to Surgery Partners, with Leerink Partners also advising; Moelis & Company advises the Special Committee; and Jefferies LLC is exclusive financial advisor to HealthSpan and provided committed financing as sole initial underwriter. Surgery Partners, headquartered in Brentwood, Tennessee, operates more than 200 locations across 30 states. The company will file a proxy statement and Schedule 13E-3 with the SEC.
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