Surgery Partners wins $45M in settlement over $760M ASC acquisition

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Brentwood, Tenn.-based Surgery Partners received $45 million in a settlement against HIG Capital and Bain Capital Investors over a $760 million acquisition of an ASC in 2017, the parties told Delaware Chancery Court on Nov. 23, according to a Law360 report. 

The settlement resolves a suit filed after Surgery Partners acquired National Surgical Healthcare allegedly using arrangements that led to an unfair price for public stockholders.

The deal involved three transactions:

1. HIG sold all its shares in Surgery Partners to Bain for $502.7 million.

2. Surgery Partners sold new preferred shares to Bain for $310 million. 

3. Surgery Partners bought the ASC from Irving Place Capital for $760 million.

According to the original suit filed by Surgery Partners shareholder Melvyn Klein in December 2017, Bain increased the price it would pay for the common stock to receive a more favorable transaction. 

In 2018, the Delaware Chancery Court threw out a direct claims suit against the three parties for breach of fiduciary duty, but it upheld derivative claims for breach of fiduciary duty against HIG and aiding and abetting claims against Bain.

Under the proposed settlement, Bain will pay $12.5 million and HIG will pay $32.5 million.

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