Bain Capital eyes control of Healthscope via US $1.4B debt deal

AUSTRALIA – Bain Capital is reportedly positioning itself to acquire a significant portion of Healthscope’s US $1.4 billion debt, a strategic move that could grant the private equity firm substantial influence—or even control—over Australia’s second-largest private hospital operator.

Healthscope, owned by Brookfield Asset Management since a US $4.4 billion acquisition in 2019, operates 38 hospitals across Australia.

The company is grappling with mounting financial pressures, including rising operational costs and challenges in securing higher reimbursements from health insurers.

These issues have led to missed rent payments and growing concerns about the company’s viability.

Strategic Implications

By acquiring Healthscope’s distressed debt—some of which has been trading for as low as 40 cents on the dollar—Bain Capital could position itself as a key stakeholder in any future restructuring or ownership realignment.

This debt-focused approach allows Bain to potentially bypass traditional M&A channels, offering a more discreet and potentially lower-cost pathway to control.

This strategy aligns with Bain Capital’s broader pattern of activity in the healthcare sector, including recent moves to take Surgery Partners private in a US $3.2 billion deal in the U.S.

Market dynamics

Healthscope’s financial struggles have prompted Brookfield to initiate a sale process, with bids due by the end of May.

Potential buyers include HMC Capital, which has already purchased between US $50–US $100 million of Healthscope’s debt.

Other interested parties include not-for-profit hospital operators like St Vincent’s, St John of God, and Epworth, though they seek rent reductions.

The Australian Competition & Consumer Commission may need to intervene to facilitate any acquisition amid the risks of collapse.