Narrow business focus in operating Ambulatory Surgical Centers and surgical hospitals; Operates in highly competitive and fragmented industry; and Moderate reimbursement risk. Leverage above 8x area over the next 12 months; Funds from operations (FFO)-to-debt of less than 10%; and Aggressive financial policy. S&P Global Ratings' stable outlook on Surgery Partners Inc. reflects our expectation that post-transaction the company will continue to generate 7%-9% revenue growth, sustain EBITDA margins around 14%-16%, and generate more than $30 million of discretionary cash flow through 2019. We could lower the rating if Surgery Partners experiences about a 100 basis points (bps) in margin decline. This would most likely be a result of difficulty integrating the NSH acquisition or reimbursement declines that cannot be
