SCHEDULE 13D/A: Bain Capital Withdraws Proposal to Acquire Remaining Shares of Surgery Partners

Bain Capital entities have withdrawn their non-binding proposal to acquire all outstanding shares of Surgery Partners, Inc. they do not already own, following feedback from the Issuer's Independent Committee.

Summary

• Bain Capital Private Equity, LP, on behalf of its affiliated Reporting Persons, initially submitted a non-binding proposal on January 27, 2025, to acquire all outstanding shares of Surgery Partners, Inc. common stock not already owned by them.
• The proposal was withdrawn on June 16, 2025, after the Independent Committee of Surgery Partners' Board of Directors indicated it would not pursue a transaction under the proposed terms.
• Despite the withdrawal, the Reporting Persons intend to continue discussions with the Issuer, its Board, and third parties regarding potential extraordinary corporate transactions, business operations, and strategic direction.
• The Reporting Persons collectively beneficially own 49,946,972 shares of Surgery Partners' Common Stock, representing approximately 38.97% of the issued and outstanding shares.
• The total issued and outstanding shares of Common Stock for Surgery Partners, Inc. were 128,160,075 as of May 5, 2025, as reported by the Issuer in its Quarterly Report on Form 10-Q.

Sentiment

Score: 4

Explanation: The withdrawal of an acquisition proposal is a negative event, removing a potential upside for shareholders. However, the continued significant ownership and stated intent of Bain Capital to engage in future discussions suggest ongoing strategic interest despite the failed bid, preventing a lower score.

Positives

• The Reporting Persons (Bain Capital entities) remain significant shareholders, holding approximately 38.97% of Surgery Partners, indicating continued vested interest.
• Bain Capital intends to continue engaging in discussions with the Issuer and Board, suggesting potential for future strategic initiatives or transactions.

Negatives

• The non-binding acquisition proposal by Bain Capital was withdrawn, indicating a failure to reach agreeable terms with Surgery Partners' Independent Committee.
• The withdrawal removes a potential near-term liquidity event or premium for shareholders who might have anticipated a full acquisition.

Risks

• Uncertainty regarding the future strategic direction of Surgery Partners, Inc. given the withdrawal of a major shareholder's acquisition proposal.
• Potential for continued discussions with Bain Capital to lead to various outcomes, including further acquisitions, dispositions, or other corporate actions, which could introduce volatility.
• The possibility of changes in corporate structure, Board composition, management, or dividend policy as a result of ongoing engagement with significant shareholders.

Future Outlook

Despite the withdrawal of the acquisition proposal, the Reporting Persons intend to continue engaging in discussions with Surgery Partners, Inc.'s Board and third parties regarding potential extraordinary corporate transactions, business operations, assets, strategy, future plans, corporate structure, Board composition, management, capitalization, and dividend policy. They also reserve the right to acquire or dispose of additional securities or engage in hedging transactions based on market conditions and the Issuer's financial position.

Management Comments

• The Independent Committee of the Board of Surgery Partners, Inc. indicated it would not pursue a transaction with the Reporting Persons under the terms set forth in the initial proposal.

Industry Context

This filing reflects a significant shareholder's strategic maneuver within the healthcare services sector, specifically impacting a company focused on surgical facilities. The withdrawal of an acquisition bid by a major private equity firm like Bain Capital can signal challenges in valuation alignment or strategic fit within the current market environment for healthcare assets. It also highlights the ongoing influence of large institutional investors on corporate governance and strategic direction in publicly traded healthcare companies.

Stakeholder Impact

• Shareholders: Potential loss of a near-term premium from an acquisition offer; continued uncertainty regarding the company's long-term strategic direction and potential future corporate actions by a major shareholder.
• Management/Board: Continued engagement with a significant shareholder (Bain Capital) regarding strategic direction and corporate structure, potentially influencing future decisions.

Next Steps

• Reporting Persons intend to continue engaging in discussions with Surgery Partners, Inc. and its Board regarding potential extraordinary corporate transactions, business operations, and strategic direction.
• Reporting Persons may acquire additional shares or other securities of Surgery Partners, Inc. in the open market or otherwise.
• Reporting Persons may dispose of any or all of their securities in Surgery Partners, Inc.
• Reporting Persons may engage in hedging or similar transactions with respect to Surgery Partners, Inc. securities.
• Reporting Persons may propose or consider other corporate actions described in Item 4 of Schedule 13D.

Key Dates

Recommendation

Keywords

Surgery Partners Inc., Bain Capital, Schedule 13D, SEC filing, common stock, beneficial ownership, acquisition proposal, corporate governance, shareholder activism, healthcare services, outpatient surgery