Today, AMSURG, the nation’s largest ASC operator/manager, announced their agreement to purchase Sheridan Healthcare, one of the country’s largest physician services providers, for $2.35 billion. You can read the materials accompanying AMSURG’s investor presentation here: AMSURG acquiring Sheridan.
For those unfamiliar with Sheridan, it’s a large player in anesthesia (with more than 1,500 providers), radiology, children’s services and emergency medicine.
A loose calculation based on Sheridan’s pro forma EBITDA as stated in the AMSURG release indicates that they are paying a multiple of around 12 times earnings. That’s huge, and it may indicate that AMSURG simply “won” an auction. Auction winners sometimes turn out to be losers.
Anesthesiology and CRNA groups currently working at AMSURG managed facilities will likely see their contracts under threat of non-renewal. They may see offers of employment.
Anesthesia groups considering a sale to Sheridan might be turned off by the deal, and may place more weight on potential deals with other non-facility-related companies.
Hospitals currently contracting with Sheridan for physician services may view the new owner, AMSURG, as a competitor and look to end their agreements with the company.
Those are, of course, just predictions.
One thing’s for certain: The market is changing. But then again, it’s always changing.
Comment or contact me if you’d like to discuss this post.
Mark F. Weiss