Surgery Partners Sells Idaho Falls Hospitals for $795 Million
Surgery Partners agreed to sell its Idaho Falls hospital interests to Intermountain Health for roughly $795 million in total consideration, a deal management said would be layered onto guidance it has already reaffirmed three times this year.
Surgery Partners (SGRY) agreed to sell its ownership interests in Mountain View Hospital and Idaho Falls Community Hospital to Intermountain Health, in a transaction that values the combined facilities at approximately $1.15 billion and delivers about $795 million in total consideration to the company. The operator of surgical facilities and hospitals disclosed the deal on July 24, marking the first divestiture of this scale in more than a year of releases dominated by decelerating volume growth and persistent net losses.
The announcement lands as Surgery Partners works to steady a business whose growth has slowed since last fall. Same-facility revenue growth ran at 6.3% in the third quarter of 2025, cooled to 3.5% in the fourth quarter, and ticked up only to 4.4% in the first quarter of 2026. Headline revenue growth followed the same arc, falling from 6.6% to 2.4% before recovering to 4.5%. The softness traces to case volume rather than pricing: same-facility case growth dropped from 3.4% to 1.3% to just 0.6% over the same three quarters, while revenue per case actually strengthened, rising from 2.8% to 2.1% to 3.8%. Pricing has been carrying the business as volume growth has nearly stalled.
Profitability has moved in the same direction. Adjusted EBITDA grew 6.1% in the third quarter of 2025 but reversed to a 4.2% decline in the fourth quarter, to $156.9 million from $163.8 million a year earlier, and kept falling in the first quarter of 2026, to $102.3 million from $103.9 million. Net losses attributable to Surgery Partners have not narrowed either, moving from $22.7 million in the third quarter of 2025 to $15.0 million in the fourth quarter to $35.9 million in the first quarter of 2026. Full-year 2025 results also came in below plan: Surgery Partners cut its guidance in the third-quarter release to $3.275 billion-$3.30 billion in revenue and $535 million-$540 million in Adjusted EBITDA, citing softer volume and payor mix, and still finished the year at $526.2 million of Adjusted EBITDA, below the low end of that lowered range.
Despite that shortfall, Surgery Partners has reaffirmed its 2026 full-year guidance of $3.35 billion to $3.45 billion in revenue and Adjusted EBITDA of at least $530 million across three consecutive releases, including the Idaho Falls announcement. Guidance excludes any impact from the pending Idaho Falls sale, with financial details of the transaction to be disclosed later.
Leverage has been slow to improve despite the stated deleveraging target. Total net debt to Adjusted EBITDA stood at roughly 4.2x to 4.3x in the third and fourth quarters of 2025 and was still about 4.3x in the first quarter of 2026. Operating cash flow has also weakened: full-year 2025 cash from operations fell to $274.3 million from $300.1 million in 2024, and the first quarter of 2026 generated just $11.7 million, though that was up from $6.0 million a year earlier.
Surgery Partners has continued to lean on capital markets and shareholder returns to manage the balance sheet. In December 2025 the company priced a $425 million add-on offering of 7.250% senior notes due 2032 to repay revolver borrowings, and in February 2026 its board authorized a $200 million share repurchase program alongside fourth-quarter results. The Idaho Falls sale gives Surgery Partners fresh proceeds to apply against that same set of priorities, even as the company has yet to say how the transaction will reshape the guidance range it has held steady through a year of slowing volume.