The deal is subject to regulatory approval and expected to close in the third quarter.
In announcing the deal, Amsurg said the tie-up will allow it to enter an adjacent market and integrate anesthesia into its portfolio of ambulatory surgery centers. The company also alluded to the potential to participate in new payment and care-delivery models, citing new opportunities to engage with payers and build competencies that “address innovation and change in healthcare.”
The combined company is expected to achieve $30 million to $40 million in additional financial benefits within three years, according to Amsurg, $10 million of which will come from the cost and operational side and the remainder from growth, including new outsourcing contracts and partnerships with health systems.
The transaction also will double Amsurg's revenue from just under $1.1 billion to nearly $2.2 billion.
In a research note, Darren Lehrich, an analyst at Deutsche Bank, described Amsurg's move as bold, allowing Amsurg to enter a new space that has been increasingly converging with the one in which it already operates. The ASC market has been subject to sluggish growth and limited opportunities to expand through consolidation, he added.
The deal also points to continued interest in hospital-based physician specialties such as anesthesia, said Jeff Swearingen, managing director at Edgmont Capital Partners, a healthcare investment bank. There are a number of synergies that Amsurg can achieve by bringing Sheridan's services into its facilities, he agreed, but cautioned that the company will still need to sidestep anti-kickback statutes.
Sheridan Healthcare, backed by private equity firm Hellman & Friedman, last month was reported to be preparing for an initial public offering. But selling the company to Amsurg could provide a faster exit for the private equity firm and reduces the risk of an unsuccessful IPO, Swearingen said.
Follow Beth Kutscher on Twitter: @MHbkutscher