Image by pikabum from PixabaySurgery Partners Inc. (Nasdaq: SGRY) will remain an independent, publicly traded company following the conclusion of its strategic review process, executives reaffirmed during the company’s second quarter 2025 earnings call on Tuesday.
Instead of pursuing a sale to Bain Capital, which had been under consideration prior to June 17, the company will pivot toward selectively selling or partnering assets to accelerate cash flow and reduce debt.
“The special committee of independent directors’ decision not to proceed with the proposed acquisition of the company by Bain Capital highlights their belief in the significant value creation opportunity we have in front of us as a publicly traded company,” Surgery Partners CEO Eric Evans said on the call.
Bain Capital remains an active and supportive investor, he added.
The process reinforced Surgery Partners’ focus on ambulatory surgery centers (ASCs), Evans said.
“We plan to selectively partner or sell facilities that can expedite leverage reduction, accelerate cash flow generation, increase focus on our core ASC service lines, and provide increased flexibility to execute on and self-fund our growth algorithm,” Evans said. “We have already begun the work to execute on this opportunity.”
Executives declined to name specific assets under review, but noted that the entire portfolio, including surgical hospitals, is being evaluated.
“I would say you should expect that across the portfolio,” Evans said. “We’re going to look at where those opportunities arise, and I’m sure some of that could be in the surgical hospital setting.”
In some cases, that could mean selling a stake in a facility to a local health system or expanding partnerships with hospital operators in select markets, he said.
“There’s going to be opportunities where the best natural owner or the best natural partnership for a particular market may not be us alone,” Evans said.
Surgery Partners reported second quarter revenue of $826.2 million, a more than 8% increase compared to $762.1 million during the same quarter of 2024.
At the end of the second quarter, Surgery Partners had 162 surgical facilities (115 consolidated). That’s down from 167 surgical facilities (127 consolidated) in Q2 2024.
The company had more than 170,000 cases in Q2 2025, with revenue per case increasing from $4,566 in Q2 2024 to $4,780 this year.
“Same-store was good (+3.4% case growth, +5.1% SS revs, in line with mgmt’s LT growth guide), which underscores continued tailwinds (aging demographics, site of service shift to outpatient settings) seen by ASCs focused on joint replacements such as SGRY,” an analyst note from the investment firm Jefferies states. “And with ~80% of SGRY’s ASCs having high acuity ortho capabilities, expect continued benefits from these secular drivers for the next several yrs.”
CMS phasing out the IPO list
The phasing out of the Medicare Inpatient Only (IPO) list over the next three years could be a meaningful tailwind for ASCs, Evans said.
“We are encouraged by the agency’s trust and the physician’s clinical experience in making safe decisions around the most appropriate sites to deliver high-quality surgical care,” he said. “Removing barriers for our surgeons to perform their full book of business in our facilities has a compounding positive impact.”
In its proposed 2026 payment rule, CMS added 276 procedures to the ASC Covered Procedures List and proposed removing 271 more from the IPO list. While Surgical Partners currently performs some of these procedures for commercial payers, the policy shift will allow surgeons to move more of their Medicare patients to ASCs as well, Evans said.
“We’re really pleased that CMS is leaning in on supporting ASC growth. They see the opportunity for cost savings, they see the opportunity for efficiency, and they’re leaving that choice to the physician,” Evans said. “Putting this decision back in the hands of the physician to make the right choice for where a patient goes, and removing obstacles for any of our physicians to bring their whole book of business, is incredibly powerful.”
He pointed to total joint replacements as an example of what’s possible when CMS lifts site-of-service restrictions.
“We saw that when the total joints were brought on. … We got more commercial after they removed [Medicare restrictions], because they could do their Medicare cases along with that,” Evans said.
Still, he cautioned investors not to overestimate the immediate impact of the 271 procedures that would come off the IPO list in 2026.
“I wouldn’t over-index on these couple hundred procedures being like a huge, massive movement,” Evans said. “It’s just part of the general trend.”
Investment in robotics
That broader trends impacting ASCs include both continued migration of surgical volume from hospitals to ASCs and the expansion of capabilities at existing facilities, including through investments in robotics, Evans said.
“Our business is already capturing momentum posed by key trends unfolding across the surgical landscape,” Evans said. “We will continue to benefit from demographic, technology and price transparency tailwinds.”
During the second quarter, Surgery Partners added eight surgical facilities through acquisitions and deployed $66 million in M&A capital, Evans said.
The company also reported continued progress on its de novo development strategy, with 10 new facilities currently under construction and several more in the pipeline.
Total joint procedures grew 26% year-over-year in the second quarter, with the company now operating 69 surgical robots across its network.
“Robots that enable our physician partners to perform increasingly more complex and higher acuity procedures,” Evans said. “These investments also help support our strong position recruitment process.”
