SCHEDULE 13D: Bain Capital Prairie Acquires 9.9% Stake in Lincoln National Corporation, Securing Board Observer Rights and Major Asset Management Mandate

Bain Capital Prairie, LLC has acquired 18.76 million shares of Lincoln National Corporation for $825.4 million, representing a 9.9% ownership stake, and will manage up to $20 billion in the insurer's general account assets.

Summary

• Bain Capital Prairie, LLC (the "Reporting Person") acquired 18,759,497 shares of Lincoln National Corporation's Common Stock on June 5, 2025, for an aggregate purchase price of $825,417,868.
• The shares were purchased at a price of $44.00 per share.
• This acquisition represents approximately 9.9% of Lincoln National Corporation's outstanding Common Stock.
• The acquisition was funded by capital contributions from equity holders of Prairie Holdings and a $550,000,000 loan from Sumitomo Mitsui Banking Corporation (SMBC).
• Bain Capital Prairie, LLC has the right to designate an observer to Lincoln National's board of directors, subject to conditions and board approval.
• Beginning on the first anniversary of the closing date, if Bain Capital Prairie continues to own at least half of the purchased shares, it may elect to require Lincoln National to appoint the observer as a voting member of the board.
• An affiliate of the Reporting Person, Bain Capital Asset Management, LP, will assume management of $1.4 billion of Lincoln National's general account assets, increasing to a minimum of $20 billion over six years.
• Lincoln National has committed to providing minimum levels of assets under management and related investment management fees to Bain Capital Asset Management, LP for ten years.
• The Reporting Person is subject to certain standstill restrictions, generally limiting beneficial ownership to less than 10% of total voting power, with exceptions.
• The Reporting Person has agreed to vote its shares in favor of matters recommended by Lincoln National's board of directors, subject to limitations.
• Transfer restrictions apply to the purchased shares, prohibiting sales until the third anniversary of the closing, after which up to one-third of the shares can be sold annually.

Sentiment

Score: 9

Explanation: The document indicates a highly positive development for Lincoln National Corporation, securing a substantial strategic investment from a reputable firm like Bain Capital, along with a significant and long-term asset management mandate. This partnership suggests strong confidence in Lincoln National's future and provides capital and strategic support.

Positives

• Lincoln National Corporation secured a significant strategic investment of $825.4 million from Bain Capital Prairie, LLC.
• The partnership includes a substantial asset management mandate, with Bain Capital Asset Management, LP managing $1.4 billion initially, growing to a minimum of $20 billion of general account assets over six years.
• Lincoln National has committed to a ten-year agreement for asset management fees, providing a stable revenue stream for the asset manager.
• The investment by a prominent firm like Bain Capital signals confidence in Lincoln National's long-term prospects.
• The agreement includes provisions for board representation, allowing for strategic input from a major investor.

Risks

• The $550,000,000 loan obtained by Prairie Holdings from SMBC is secured by a pledge of Prairie Holdings' equity interest in the Reporting Person, equity distributions by the Reporting Person to Prairie Holdings, and Prairie Holdings' and Holdings GP's rights to make capital calls of investors in Prairie Holdings.
• The Credit Agreement matures on June 5, 2030, but must be prepaid earlier upon certain events, including an event of default.
• Upon an event of default under the Credit Agreement, lenders may sell the pledged collateral to repay amounts owed.

Future Outlook

Bain Capital Prairie, LLC intends to take an active role in working with Lincoln National Corporation's management and board of directors on operational, financial, and strategic initiatives. The investment management agreement is set to grow significantly, with assets under management increasing to a minimum of $20 billion over six years, indicating a long-term strategic partnership.

Management Comments

• The Reporting Person acquired the securities reported herein for investment purposes.
• In its capacity as a stockholder of the Issuer with the right to representation on the board of directors of the Issuer after the first anniversary of the Closing Date, the Reporting Person takes, and intends to continue to take, an active role in working with the Issuer's management and the board of directors on operational, financial and strategic initiatives.

Industry Context

This transaction represents a significant strategic investment by a major private equity firm, Bain Capital, into a publicly traded U.S. insurance and financial services company, Lincoln National Corporation. Such investments often signal a belief in the target company's long-term value potential and frequently involve operational and strategic collaboration. The accompanying large-scale asset management agreement is a notable component, aligning the financial interests of both parties and potentially leveraging Bain Capital's expertise in asset management within the insurance sector.

Comparison to Industry Standards

• The document does not provide specific comparable companies, projects, or results to assess the transaction in the context of global benchmarks. This is a specific strategic investment and partnership rather than a performance report.

Corporate Governance

Related Party Transactions

• Lincoln National Corporation's insurance subsidiaries, including The Lincoln National Life Insurance Company, will enter into an investment management agreement with Bain Capital Asset Management, LP (an affiliate of the Reporting Person).
• Under this agreement, Bain Capital Asset Management, LP will manage $1.4 billion of general account assets, increasing to a minimum of $20 billion over six years, with Lincoln National committing to minimum investment management fees for ten years.

Stakeholder Impact

• **Shareholders:** The investment by Bain Capital brings a significant strategic partner and capital infusion, potentially enhancing long-term value and stability. The standstill and voting agreements provide some protection against immediate aggressive shareholder activism.
• **Employees:** A strategic partnership could lead to operational efficiencies or strategic shifts, potentially impacting roles or organizational structure over time, though not explicitly detailed.
• **Customers:** Indirectly, through the management of general account assets, the partnership could influence investment strategies, potentially impacting the financial strength and offerings of Lincoln National's insurance products.
• **Creditors:** The capital infusion and strategic partnership could improve Lincoln National's financial stability and outlook, which is generally positive for creditors.
• **Suppliers:** No direct impact mentioned, but general operational changes could indirectly affect supplier relationships.

Next Steps

• Bain Capital Prairie, LLC will have the right to designate an observer to Lincoln National's board of directors.
• Beginning on the first anniversary of the closing date, Bain Capital Prairie may elect to require Lincoln National to appoint a voting member to its board.
• Bain Capital Asset Management, LP will assume management of $1.4 billion of Lincoln National's general account assets, increasing to a minimum of $20 billion over six years.
• Lincoln National is committed to providing minimum levels of assets under management and related investment management fees for ten years.
• Transfer restrictions on the purchased shares will ease after the third anniversary of the closing, allowing for phased sales.

Key Dates

Recommendation

Keywords

Lincoln National Corporation, Bain Capital Prairie, SEC Filing, Schedule 13D, Equity Investment, Strategic Partnership, Asset Management Agreement, Corporate Governance, Insurance, Financial Services