Iowa ASC Partners with SCA & Trinity Joint VenturePosted on April 05th, 2015 by The Bloom Organization
The Bloom Organization (“Bloom”) announced today the 55% ownership interest sale of its client, Mississippi Valley Surgery Center & Endoscopy Center (“MVSC”), to a joint-venture of Surgical Care Affiliates* (“SCA”) and UnityPoint Health – Trinity** (“Trinity”), a statewide hospital system.
Mississippi Valley Surgery Center is made up of a large multi-specialty surgery center and an endoscopy center. The surgery center opened its doors in 1996, supported by a small group of local physicians with the goal of providing a convenient and patient-centered facility for outpatient surgical services. The surgery center consists of seven (7) operating rooms, six (6) overnight rooms, 16 pre-op beds, and 20 post-op beds in its nearly 30,000 square foot facility. Mississippi Valley Endoscopy Center, established on Utica Ridge Road in Davenport in 2004, is a 7,360+ square foot GI center that has four (4) endoscopy rooms, one (1) procedure room, with 12 pre- and post-op beds. This location is dedicated to performing colonoscopy, esophageal endoscopy and other gastrointestinal procedures. Today, approximately 9,000 cases a year are performed at the two facilities that employ approximately 110 staff members.
Together, MVSC is the largest surgical center in the state of Iowa and an attractive asset to a number of prospective buyers. “The Bloom team helped us assess our options and find the right strategic fit,” explained Michael Patterson, President and CEO of Mississippi Valley Health. “They were with us every step of the way and invaluable throughout the process.”
MVSC and Bloom developed a process that yielded 12 qualified buyers, including the largest ASC national companies and regional hospital systems. The competitive bidding generated offers with premium EBITDA multiples and prices. Most importantly, Bloom’s discussions within the marketplace spurred joint ventures between ASC companies and regional hospital systems to strengthen the proposed partnerships.
One of the potential suitors and a management company that was eager to expand into Iowa was SCA. “We are excited to have been able to become partners with such a prestigious and important group of physicians,” stated Tim Buono, VP of Development at SCA. “This was a complicated deal, but having Bloom involved was instrumental in helping connect all parties and coordinate the pieces in this complicated joint venture transaction.”
The MVSC joint venture with SCA and Trinity represents the type of strategic alliance with ASC management companies and health systems to which many surgery centers are gravitating. Such an alliance is always a very difficult negotiation process. Hospital-based health systems and physician-owned ASCs often share the mutual goal of a partnership, but the deal can fall apart during negotiations if not handled properly. Bloom was able to maximize the up front value of MVSC while allowing the physicians and the local health system to focus on creating the longer-term vision for high quality, low cost care for the local community.
“MVSC represents the type of transaction we are seeing more and more in this ever changing health care environment: a market consolidation strategy,” said Henry Bloom, Founder and President of The Bloom Organization. “Bringing together the preeminent surgery center (comprised of the lead surgeons in all specialties) together with the dominant hospital system in the state and the resources of an ASC management company like SCA is the key to insuring continued prosperity for each party.”
*SCA operates 185 surgical facilities, including surgery centers, surgical hospitals, and hospital surgery departments, in 34 states. SCA employs approximately 5,000 teammates and more than 7,500 physicians perform procedures in SCA facilities each year. More than 2,000 of these physicians, along with 45+ leading health systems, including Sutter Health, Catholic Health Initiatives, Geisinger Health System, MemorialCare Health System, Saint Alphonsus Health System, and Texas Health Resources, are partnered with SCA. More at http://www.scasurgery.com/.
**Trinity is a regional integrated health care delivery system including four full-service hospitals in Rock Island and Moline, Illinois and Bettendorf and Muscatine, Iowa with a total of 584 licensed inpatient beds. UnityPoint Health – Trinity hospitals, clinics, home health care agency, mental health center, health sciences college and residency program employ more than 3,000 employees. More at https://www.unitypoint.org.