There is a huge growth opportunity for ASC chains, as around 70 percent of freestanding surgery centers remain independent, according to VMG Health's "Annual Healthcare M&A Report 2022."
Thirty percent of ASCs are owned by leading national chains and other operators, including private equity firms. Here is the market share breakdown for the large national chains:
1. United Surgical Partners International, part of Tenet Healthcare: 7.3 percent
2. AmSurg, part of Envision Healthcare: 4.2 percent
3. SCA Health, part of Optum: 4.2 percent
4. HCA Healthcare: 2.5 percent
5. Surgery Partners, backed by Bain Capital: 2.3 percent
The five leading ASC chains have big plans for the future. Tenet executives laid plans to grow USPI to acquire or develop more than 150 ASCs over the next three years to exceed 600 ASCs in its portfolio by the end of 2025. SCA Health, Surgery Partners and AmSurg have also been adding surgery centers and health system partnerships to strengthen their core business.
Growing through acquisitions won't be cheap. VMG Health reported observing 25 transactions in 2021 with the median EBITDA multiples around 7.8x. Multiples at the low end were 7.5x, and multiples at the high end were 8.4x for individual ASCs.
The report concludes: "ASCs are expected to remain attractive targets over the long-term investment horizon due to their ability to generate consistent distributable cash flows and to contribute to lower cost of care in the United States. Although the removal of certain higher acuity procedures may result in a near-term disruption to certain ASCs, a continued increase in growth and consolidation in this subindustry is expected throughout the remainder of 2022 and beyond."