Shares of Surgery Partners surged 10.2% to $15.06 on September 22, 2026, as investors digested the completed divestiture of its Idaho Falls facilities to Intermountain Health — a deal that hands the company a badly needed cash lifeline but also shrinks its revenue base at a precarious moment. Surgery Partners Unloads Idaho Hospitals for $587 Million in Cash — Is Shrinking the Balance Sheet Enough to Grow the Stock?
Shares surged 10.2% to $15.06 as investors warmed to Surgery Partners' completed sale of its Idaho Falls hospital operations to Intermountain Health, a deal that floods the company with cash but leaves it a meaningfully smaller business. The question now: does paying down debt on a $3.7 billion pile solve the underlying earnings problem?
$587 Million in Cash, but $210 Million Disappeared Between Gross and Net
Surgery Partners received $797 million in gross proceeds and $587 million in net cash proceeds at closing. That $210 million gap covers transaction costs, working capital adjustments, and existing debt at the facilities. The facilities were valued at roughly $1.15 billion , meaning Surgery Partners captured only about half that total value in spendable cash — a reminder that its ownership was partial, shared with physicians and Intermountain itself.
Debt Gets a Dent, but the Hole Is Still Deep
Total debt stood at roughly $3.7 billion as of Q1 2026, including a $1.37 billion senior secured term loan and $1.225 billion of 7.25% senior unsecured notes due 2032.
Management says leverage — total net debt divided by operating earnings before depreciation — should improve by about 30 basis points from 4.4x at the end of Q2. Dropping to around 4.1x helps, but remains elevated for a company that posted a $15 million net loss last quarter and paid $69 million in interest expense in Q1 alone.
The Remaining Business Is Leaner — and Smaller
On a pro forma full-year basis, excluding Idaho Falls entirely, revenue guidance drops to $2.60–$2.67 billion with Adjusted EBITDA of at least $414 million — roughly a 22% revenue haircut and a $116 million EBITDA reduction from the original $530 million target. The upside: Medicaid exposure falls below 2% of revenue , and the company becomes a focused outpatient surgery center operator, a faster-growing corner of healthcare.
Wall Street Isn't Calling This a Turnaround Yet
TD Cowen reiterated a Buy rating on September 18 with a $19 price target , implying roughly 26% upside — but that target has not moved higher on the deal. With a market capitalization of roughly $1.7 billion against pro forma EBITDA of $414 million, the stock trades at just ~4x operating earnings, cheap by sector standards. The catch: heavy debt and interest costs continue to constrain actual earnings , and the company must prove it can grow what remains.