The ASC industry experienced a wave of megamergers between 2015 and 2018 that fundamentally shifted the competitive landscape. Although the pace of large-scale consolidation has slowed, significant deals and investments continue to shape the industry's trajectory.
Here are eight key developments in ASC megadeals over the past five years:
1. In November, Dallas-based GI Alliance entered a definitive agreement with Dublin, Ohio-based Cardinal Health, a pharmaceutical distributor and healthcare services company. Cardinal Health will acquire a 71% stake in GI Alliance for $2.8 billion, buying out shares from physician owners and Apollo Global Management affiliates. This acquisition marks Cardinal Health’s entry into the gastroenterology sector.
2. Optum's ASC arm, SCA Health, is reportedly a potential buyer of Brentwood, Tenn.-based Surgery Partners, according to Bloomberg. Other interested buyers include private equity firm TPG and various strategic bidders. Surgery Partners, the third-largest ASC operator in the U.S., oversees more than 160 centers and 4,600 affiliated physicians. The company merged with National Surgical Healthcare in 2017, and Bain Capital later acquired a stake from H.I.G. Capital.
3. ASC giant United Surgical Partners International, owned by Tenet Healthcare, quietly purchased Covenant Physician Partners in the first quarter of 2024. The deal reportedly followed financial challenges faced by Covenant’s private equity owner, KKR, including high labor costs and rising interest rates. KKR opted to pay off lenders to avoid a distressed debt exchange.
4. In December 2023, SCA Health quietly purchased National Cardiovascular Partners from Fresenius Medical Care. Fresenius, which largely provides kidney dialysis services, confirmed in a January news release that it sold National Cardiovascular Partners and its 21 cardiac catheterization and vascular labs.
5. In July 2023, SCA Health also acquired Pivotal Healthcare. The Ponte Vedra Beach, Fla.-based cardiovascular care platform has 11 affiliate practices and 14 locations, according to the company's website.
6. In 2022, Surgery Partners raised an $800 million equity offering. Bain Capital Private Equity, the company’s investment partner, participated with $225 million of the raise. The other $575 million is an upsized underwritten public offering.
7. In 2022, Tenet paid $406 million to acquire Dallas-based Baylor Scott & White Health's 5 percent equity position in USPI, which gave Tenet full ownership of USPI.
8. In 2020, Tenet acquired more than 90 ASCs from SurgCenter Development for approximately $1.2 billion, paving the way for USPI to market dominance.