Surgery Center shops $335 million eight-year notes; pricing Monday

By Paul Deckelman

New York, June 19 – Surgery Partners, Inc. plans to sell $335 million of eight-year senior notes (Caa2/CCC+), with pricing on the issue expected later Monday, syndicate sources said.

The Rule 144A and Regulation S offering is being brought to market via Jefferies & Co. and KKR Capital Markets.

The offering was being shopped to potential investors via a Monday morning conference call, with pricing seen later in the session.

The notes will come with three years of call protection, with the first call price equal to par plus half the coupon.

The notes will be issued by the Nashville-based surgical facilities operator’s wholly owned subsidiary, Surgery Center Holdings, Inc.

Proceeds from the bond deal will be used to help fund the acquisition of National Surgical Healthcare Inc., a Chicago-based owner and operator of surgical facilities in partnership with local physicians, from Irving Place Capital for about $760 million and to refinance an existing term loan.

Besides the bond-sale proceeds, financing for the acquisition deal will include a new $1.29 billion seven-year senior secured covenant-light term loan, as well as around $295 million of preferred equity from Bain Capital Private Equity, which will acquire H.I.G. Capital’s existing equity stake in Surgery Partners.

Sara Rosenberg contributed to this report

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