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17 Transaction & Valuation AmSurg-Sheridan: A $2.35 billion transaction Nashville, Tenn.-based ASC management and development company Am- Surg agreed to acquire Sunrise, Fla.-based physician service outsourcing company Sheridan Healthcare in late May for a cash and stock transaction of $2.35 billion. The combined company has an addressable market of about $70 billion and spans nearly 4,600 physician relationships in 38 states. "[The deal] is a way for AmSurg to diversify in a higher growth sector," says Greg Hagood, senior managing director at SOLIC Capital Advisors. "There are also synergies. Sheridan is 70 percent anesthesia services, and it gets the benefit of efficiency at surgery centers. Anesthesiology services accelerate what AmSurg surgeons do well." Surgery Partners-Symbion: Creating a competitive edge In June, Chicago-based Surgery Partners agreed to purchase Green Hills, Tenn.-based Symbion for $792 million in cash. The former competitors created a united company based in their consoli- dation deal, which set the stage for them to become serious competitors in the same markets as other management and development companies, like SCA and USPI. "If [Surgery Partners and Symbion] want to compete with the larger market players, they need both expanded access to capital and to create greater operating efficiencies through economies of scale. The deal positions them to achieve," says Mr. Hagood. Long-term outlooks While very different, both deals are viable growth strategies with similar risks in the stagnated ASC market; in each case, the key to the deal's strategy is to create a viable alternative to recruiting independent physicians through tap- ping into larger sources of physician recruitment — AmSurg through physi- cian outsourcing companies and Surgery Partners through acquisition of a resource-rich competitor. In both cases, the partnerships better position these new companies to compete for joint venture agreements with large health sys- tems, a market currently dominated by companies such as USPI and SCA. There are, of course, a number of smaller ASCs and ASC management and development companies in the market that are doing well. However, growth opportunities without a reliable source of recruitable, independent physi- cians may be limited. The fragmented nature of the physician staffing company market as opposed to the more consolidated surgery center market means plenty of opportunity for enterprising surgery center companies willing to create creative partner- ships, according to Mr. Hagood. "How much private equity have you seen going into surgery centers in the past few years? Not much," he says. "There's a lot of opportunity in physician staffing companies….Physicians want to be employed, so they're less likely to be independent, which is exactly what we've been seeing in the market." n • Want competitive bids? • Want the best price and terms? • Want to partner with a hospital? • Which of the 30 ASC companies is best for you? • Want to sell your ASC real estate? Want to sell your ASC or endoscopy center? ASC Sales Purchases Mergers Acquisitions Valuations Joint Ventures Partnering Consulting Jon Vick, President of ASCs Inc., has facilitated over 250 ASC partnership transactions. He specializes in ASC sales, strategic partnering, and ASC/MOB real estate sales. To find out how we can facilitate the sale of your ASC, contact Jon Vick at JonVick@ASCs-Inc.com or 760-751-0250 Get more information about how ASCs Inc. can find you the best deal, visit www.ASCs-Inc.com today! What the Biggest ASC Transactions in 2014 Mean for 2015 (continued from cover) 13th Annual Spine, Orthopedic and Pain Management-Driven ASC Conference + The Future of Spine June 11-13, 2015 • Westin Michigan Avenue Hotel • Chicago, IL 90+ Surgeons Speaking & 108 Sessions Key Note Speakers: Deion Sanders, Billy Beane and Bill Walton For more information, visit www.beckersspine.com or call (800) 417-2035.