Intermountain Health to Buy Idaho Falls Hospitals in $796.6 Million Deal
Surgery Partners said the sale of Mountain View Hospital and Idaho Falls Community Hospital will make it a pure-play short-stay surgical operator.
Intermountain Health, a nonprofit hospital system headquartered in Utah, agreed to buy Mountain View Hospital, LLC, and Idaho Falls Community Hospital, LLC, from Surgery Partners, Inc. (SGRY) for approximately $796.6 million in an asset-purchase transaction.
The short-stay surgical facility owner and operator said the sale is the largest step yet in its portfolio-optimization strategy and is expected to be accretive to adjusted earnings growth on an annual basis, in addition to reducing balance-sheet leverage and improving free-cash-flow conversion.
“With the completion of this important transaction, Surgery Partners enters a new chapter better positioned for long-term growth as a pure-play short-stay surgical provider,” said Eric Evans, chief executive officer of Surgery Partners.
The combined Idaho Falls facilities employ more than 150 physicians and include 126 beds across nine surgical specialties, plus oncology, emergency department and ICU services, and neonatology. Mountain View Hospital, founded in 2002, operates as a surgical hub and Level III NICU; Idaho Falls Community Hospital opened in 2019. Physician ownership of Mountain View Hospital will remain unchanged.
Surgery Partners had already placed signature pages to definitive agreements in escrow in July, valuing the combined facilities at approximately $1.15 billion, with total consideration to the company of approximately $795 million. The company said it expects to receive substantial cash proceeds upon closing, with the final amount subject to customary purchase-price adjustments for indebtedness, working capital, transaction expenses and other closing items.
Closing remains subject to customary conditions, including execution of binding securities purchase agreements after Mountain View Hospital physician-member and physician-governing-board approvals, expiration of Hart-Scott-Rodino waiting periods, other material regulatory approvals, and certain third-party consents. The transaction is expected to close in the coming months, subject to those approvals.
Intermountain Health operates 34 hospitals, approximately 400 clinics, medical groups with some 4,600 employed physicians and advanced care providers, and the Select Health nonprofit health plan, with locations in six states and additional operations across the western United States.
Surgery Partners, founded in 2004 and headquartered in Brentwood, Tennessee, reported more than 200 locations in 30 states, including ambulatory surgery centers, surgical hospitals, multispecialty physician practices and urgent-care facilities.