National Surgical Hospitals Inc, an operator of U.S. surgical centers that focus on orthopedic and spine operations, is exploring a sale that could potentially value it at close to $1 billion, including debt, according to people familiar with the matter.
Surgery center operators are seeking scale in a fragmented market and face uncertainty over the future of the Affordable Care Act (Obamacare), which has boosted the ability of some patients to afford short-stay and ambulatory surgical care.
Chicago-based National Surgical Hospitals, which is owned by buyout firm Irving Place Capital, is working with an investment bank on a sale process, the people said this week, asking not to be identified because the discussions are private.
National Surgical Hospitals has 12-month earnings before interest, taxes, deprecation and amortization of around $90 million, the people said. There is no certainty that the auction for the company will result in a sale, the people added.
Irving Place Capital and National Surgical Hospitals offered no comment.
Healthcare services have been under pressure since last month, after the U.S. presidential election of Donald Trump raised questions about the future of Obamacare, which has boosted demand by giving millions more people access to health insurance.
Founded in 1998, National Surgical now spans 20 surgical facilities in 12 states. Irving Place acquired National Surgical Hospitals in 2011 for an undisclosed amount.
Under Irving Place's ownership, National Surgical Hospitals made three add-on acquisitions, including Savannah, Georgia-based Optim Healthcare last year, which added a network of nearly 50 physicians.
The vast majority of the company's revenue comes from surgical centers that treat the musculoskeletal system. About 20 percent comes from a variety of other operations, including for the eyes and the gastrointestinal tract.
(Reporting by Greg Roumeliotis and Carl O'Donnell in New York; Editing in New York)