Surgery Partners' takeover offer should rekindle interest - analyst

Seeking Alpha News (Tue, 28-Jan 11:33 AM)

A Surgery Partners (NASDAQ:SGRY) takeover bid disclosed on Tuesday should rekindle interest among potential private equity and strategic buyers, according to an RBC analyst.

Bain Capital Private Equity, which has a 39% stake in Surgery Partners (NASDAQ:SGRY), made a non-binding bid for $25.75 a share, according to a 13D/A filing on Tuesday. Shares of Surgery Partners jumped 18% on the offer.

"We are encouraged by Bain’s engagement and expect the offer to accelerate interest among potential strategic and financial buyers in the very near-term," RBC analyst Ben Hendrix, who has an outperform rating and $35 price target on SGRY, wrote in a note on Tuesday. "Despite the strong reaction in shares this morning, the valuation still falls short of pre-3Q24 trading levels ~$30 per share, or ~12x forward EBITDA-NCI."

The bid comes after Bloomberg reported in August that TPG Inc. (TPG) and UnitedHealth (UNH) were among the suitors interested in the healthcare services firm. Bloomberg first reported in July that SGRY was exploring options, including a potential sale.