Surgery Partners (Nasdaq: SGRY) has expanded its California footprint with the acquisition of multiple San Jose-based ambulatory surgery centers (ASCs) – two of the largest in the region.
Financial terms of the deal – announced by Brentwood, Tennessee-based M&A advisory firm Bailey & Company on May 29 – were not disclosed.
The transaction underscores Surgery Partners’ ongoing efforts to scale its national platform through targeted acquisitions, specialty growth and physician alignment. During the company’s Q1 2025 earnings call held in the first half of May, Surgery Partners noted completing at least five surgical facility acquisitions year to date.
During that call, CFO Dave Dougherty said the company had a robust M&A pipeline, though de novo growth will be a primary priority.
“Our balance sheet is in great shape,” Dougherty said. “We’re sitting on over $600 million in liquidity and expect leverage to continue trending down toward our long-term target of 3 times or less.”
The recently acquired ASCS were Montpelier Surgery Center and Advanced Surgery Center. For Surgery Partners, the transactions expand the ASC giant’s catchment area in the region while strengthening its position as the largest ASC presence in the South Bay, according to Bailey & Company’s announcement.
“Surgery Partners has established its commitment to furthering health outcomes with these strategic acquisitions in the South Bay,” Richard Jacques, managing director at Bailey & Company, said. “We were proud to help facilitate these transactions and wish the team the best as they continue to grow their capabilities and traction across the country.”
Surgery Partners’ purchase adds to its growing network of more than 180 facilities across the U.S. and comes at a time of accelerated investment in the ASC space.
“We look forward to continuing to serve the San Jose community while increasing positive health outcomes across the area with the added capabilities of Surgery Partners’ network,” Dr. Huy Trinh, lead partner in both Montpelier Surgery Center and Advanced Surgery Center, said.
Building momentum for a big move
The San Jose deal follows a strong start to 2025 for Surgery Partners.
In the first quarter, the company reported that same-facility revenue increased 5.2%, driven by 6.5% case growth. Executives credited that momentum to higher-acuity specialty procedures, effective physician recruitment and a steady pace of center additions.
“We performed over 160,000 surgical cases in the quarter, up 4.5% from 2024,” Surgery Partners CEO Eric Evans said during the Q1 call. “Our orthopedic case volume grew 3.4%, and total joint procedures jumped 22% year over year.”
The company’s latest acquisition comes amid broader market intrigue around Surgery Partners’ ownership. Bain Capital, the company’s majority shareholder, is currently pursuing a go-private transaction.
Yet some analysts and stakeholders argue that the proposal does not fully account for long-term ASC tailwinds, including favorable payer trends, increasing procedural migration from hospitals and improving reimbursement environments for outpatient specialties.
With the San Jose ASC acquisitions and others in the pipeline, Surgery Partners appears intent on continuing its roll-up strategy while deepening relationships with health systems and physician groups amid the speculation.
“The ASC landscape continues to shift in our direction, and we’re well positioned to capture that growth,” Evans said during the Q1 call.
As of March 31, Surgery Partners owned or operated a consolidated portfolio of 164 surgical facilities, comprising 145 ASCs and 19 surgical hospitals in 30 states. It owned a majority interest in 83 of those surgical facilities.
