S&P views Surgery Partners positively

S&P said it revised its outlook for Surgery Partners, Inc. to positive from stable and affirmed the B- issuer rating.

The company recently held a $575 million public offering of common stock and expects to complete a $225 million private placement with its majority owner, Bain Capital, within 30 days. Additionally, it granted the underwriters an option to buy additional shares that could raise up to $86 million.

“We expect the company will use about $700 million-$720 million of the proceeds to prepay debt, with the remaining cash, net of fees and expenses, going to the balance sheet,” S&P said in a press release.

The agency said it now forecasts S&P Global Ratings'-adjusted debt to EBITDA of 7.4x in 2023 and 6.8x in 2024, compared with the previous expectation of 8.3x and 7.8x in 2023 and 2024, respectively.

S&P said it also sees Surgery Partners operating performance continuing to improve, with revenue growth in the high-single digits to low-double digits over each of the next two years.

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