Surgery Partners Sells Idaho Falls Facilities for $797M, Streamlines Portfolio — Surgery Partners, Inc.

Event summary

Surgery Partners completed the sale of its Idaho Falls facilities to Intermountain Health for $797M in gross proceeds.
Transaction valued the facilities at $1.15B, representing a 7x multiple on LTM adjusted EBITDA.
Proceeds will primarily be used to pay down debt, reducing balance sheet leverage by 30bps.
The sale eliminates Medicaid-heavy service lines, reducing Medicaid payor mix by 50% and eliminating neonatology, obstetrics, and inpatient pediatrics.
Updated 2026 guidance reflects the removal of Idaho Falls Facilities' contribution, with pro forma revenue expected between $2.60B and $2.67B.

The big picture

Surgery Partners' sale of its Idaho Falls facilities to Intermountain Health marks a strategic pivot towards a pure-play short-stay surgical model. The $797M transaction not only strengthens the company's balance sheet but also streamlines its portfolio by eliminating lower-margin, Medicaid-heavy service lines. This move aligns with broader industry trends of healthcare consolidation and specialization, as providers seek to optimize their offerings in response to shifting payor dynamics and regulatory pressures.

What we're watching

Debt Reduction Impact: How the $587M in net proceeds will affect Surgery Partners' balance sheet leverage and financial flexibility.
Portfolio Focus: Whether the elimination of lower-margin service lines will improve operational efficiency and profitability.
Strategic Realignment: The pace at which Surgery Partners can integrate the transaction proceeds into its core short-stay surgical business.