Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Surgery Center Holding’s $792M acquisition of Symbion conditioned on divestiture, (Nov 3, 2014)

By Greg Hammond, J.D.

Surgery Center Holdings, Inc. (SCH) and Symbion Holdings Corp. have agreed to divest Symbion’s ownership interest in an Orange City, Florida ambulatory surgical center, resolving FTC charges that SCH’s $792 million acquisition of Symbion would be anticompetitive. According to the Commission, the divestiture will restore the competition that would otherwise be lost due to the proposed acquisition, and would further help protect consumers from higher health care costs (In the Matter of H.I.G. Bayside Debt & LBO Fund II, L.P., File No. 141-0183, Dkt. No. C-4494).

SCH and Symbion represent two of the three largest providers of outpatient surgical services to commercially insured patients in the relevant geographic market including Orange City and Deltona, Florida, the FTC asserted in its complaint. Consequently, the proposed merger, if consummated, would substantially lessen competition for the sale and provision of outpatient surgical services to commercial health plans and commercially insured patients in the Orange City/Deltona area, the FTC alleged. Specifically, the Commission asserted that the likely ultimate effect of the proposed merger would be that prices of outpatient surgical services sold to commercial health plans and commercially insured patients would rise above competitive levels, and there would be a decrease in the quality or availability of outpatient surgical services in the relevant geographic area.

Due to the likely anticompetitive effects of the proposed acquisition, the FTC is requiring that the parties divest Blue Springs Surgery Center to Dr. Mark W. Hollmann, if he receives prior approval of the Commission, or to another acquirer that receives such approval. The parties agreed to the divestment condition on October 22.

In a related development, the State of Florida has filed suit against SCH and Symbion to block the merger. According to the lawsuit, the proposed merger of the two largest operators of ambulatory surgery centers would substantially lessen competition for providing ambulatory surgery services to commercially insured patients in southwest Florida. The complaint was filed by Attorney General Pamela Bondi on October 31 in the federal district court in Tallahassee (The State of Florida v. H.I.G. Bayside Debt & LBO Fund II, L.P., Case No. 4:14-cv-00583).

Companies: Surgery Center Holdings, Inc.; Symbion Holdings Corp.

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