SCHEDULE 13D/A: Bain Capital Proposes $25.75 Per Share Takeover of Surgery Partners, Inc.

Bain Capital Private Equity, a significant shareholder in Surgery Partners, Inc., has submitted a non-binding proposal to acquire all outstanding shares it does not already own for $25.75 per share in cash.

Summary

• Bain Capital Private Equity, through its affiliated Reporting Persons (BCPE Seminole Holdings LP, BCPE Seminole Holdings II Intermediate LP, BCPE Seminole Holdings III LP, and BCPE Seminole Holdings IV LP), delivered a non-binding proposal to the Board of Directors of Surgery Partners, Inc.
• The proposal offers to acquire all outstanding shares of Common Stock not already owned by the Reporting Persons for cash consideration of $25.75 per share.
• The Reporting Persons collectively beneficially own an aggregate of 49,946,972 shares of Common Stock, representing approximately 39.3% of the issued and outstanding shares.
• The ownership percentages are based on a total of 127,113,514 shares of Common Stock issued and outstanding as of November 5, 2024, as reported by the Issuer in its Quarterly Report on Form 10-Q filed on November 12, 2024.
• The proposal is explicitly non-binding and does not obligate either the Reporting Persons or the Issuer to negotiate or enter into definitive transaction documentation, nor to complete the Proposed Transaction.
• A binding commitment would only result from the execution and delivery of definitive transaction documentation, which is likely to be subject to customary closing conditions.
• The Reporting Persons have not proposed a specific structure for the Proposed Transaction and have not yet received any feedback from the Issuer.
• If the Proposed Transaction is consummated, it could lead to an acquisition of additional securities, an extraordinary corporate transaction (such as a merger), other material changes in the Issuer's business or corporate structure, and the delisting of the Common Stock from the Nasdaq Global Stock Market.

Sentiment

Score: 7

Explanation: The proposal offers a potential premium to shareholders, indicating a positive outlook from a major investor, but the non-binding nature introduces uncertainty regarding its consummation.

Positives

• Bain Capital's non-binding proposal to acquire outstanding shares for $25.75 per share in cash represents a potential premium for existing shareholders, indicating a higher valuation than the current market price might reflect.
• The proposal from a major existing shareholder (Bain Capital) suggests a strong belief in the company's value and future potential, potentially through full ownership.

Negatives

• The proposal is explicitly non-binding, meaning there is no assurance that a definitive agreement will be reached or that the transaction will be consummated.
• The Reporting Persons reserve the right to modify or withdraw the proposal at any time, introducing uncertainty for shareholders.
• There is no guarantee on the terms of any such transaction if one were to be consummated, which could differ from the initial proposal.

Risks

• The Proposed Transaction is non-binding and may not result in a definitive agreement or consummation, leading to potential market volatility if the proposal is withdrawn.
• The Reporting Persons may modify or withdraw the proposal at any time, which could negatively impact the Issuer's share price.
• Uncertainty regarding the final terms of any potential transaction, should one proceed.
• If the transaction is consummated, the Issuer's Common Stock would become eligible for termination of registration and would be delisted from the Nasdaq Global Stock Market, removing public trading access for shareholders.

Future Outlook

The Reporting Persons intend to continue engaging in discussions with the Issuer's Board and/or third parties, including potential debt and equity financing sources. They may propose or consider various corporate actions, including mergers, changes in business operations, corporate structure, Board composition, management, capitalization, and dividend policy. They reserve the right to modify or withdraw the proposal at any time and expect to negotiate terms with the Issuer. The Reporting Persons will regularly review their investment and may acquire or dispose of additional securities or engage in hedging transactions. No further disclosures regarding the proposal are intended until a definitive agreement is reached or unless required by applicable U.S. securities laws.

Industry Context

This filing primarily details a specific corporate action, a potential take-private transaction, initiated by a major private equity shareholder. It reflects a strategic move by Bain Capital regarding its investment in a healthcare services company, rather than broad industry trends.

Related Party Transactions

• The non-binding proposal from Bain Capital Private Equity to acquire all outstanding shares of Surgery Partners, Inc. not already owned by the Reporting Persons is a related party transaction, as Bain Capital entities are significant shareholders (39.3% aggregate beneficial ownership).

Stakeholder Impact

• Shareholders: Potential for cash acquisition at $25.75 per share, offering a premium. However, there is a risk of no deal or a deal on different terms due to the non-binding nature. If consummated, shares would be delisted from Nasdaq.
• Employees/Management: Potential for changes in corporate structure, management, and operations if the transaction is consummated, depending on Bain Capital's future plans for the company.
• Creditors: Potential changes in capitalization and debt structure if the transaction is consummated, which could impact existing debt agreements.

Next Steps

• Reporting Persons intend to continue discussions with the Issuer's Board and/or third parties, including debt and equity financing sources.
• Reporting Persons may propose or consider proposals and counterproposals concerning extraordinary corporate transactions (e.g., merger, reorganization, liquidation), business, operations, assets, strategy, future plans, corporate structure, Board composition, management, capitalization, dividend policy, charter, bylaws, corporate documents, agreements, de-listing, or de-registration of the Issuer.
• Reporting Persons expect to respond to inquiries from, and negotiate the terms of the Proposal with, the Issuer and its representatives.
• Reporting Persons intend to regularly review their investment in the Issuer and may acquire additional shares or other securities, dispose of any or all of their securities, or engage in hedging or similar transactions.

Key Dates

Recommendation

Keywords

Surgery Partners Inc., Bain Capital, Schedule 13D, acquisition proposal, takeover bid, common stock, private equity, delisting, corporate transaction, healthcare services