BayMark Completes Out-of-Court Debt Restructuring - Behavioral Health Business
BayMark Health Services, based in Lewisville, Texas, announced on Monday the completion of its new-money recapitalization and a debt-for-equity exchange. This deal, previously disclosed earlier in the year, stands as a significant setback among scaled, private equity-backed addiction treatment providers. Similar situations have also occurred with companies like Discovery Behavioral Health and Summit BHC in recent months.
"This agreement reflects the strength of BayMark’s business and the confidence our financial partners have in our long-term vision," said Marshal Salomon, CEO of BayMark, in a press release.
The release further states that the deal enjoys the unanimous support of its creditors, although the specific details were not disclosed. It assures that all existing relationships remain intact and that the quality and availability of care have not been affected.
The company has not responded to a request for comment.
According to public documents, BayMark once carried a debt load of approximately $1 billion and faced bankruptcy unless an out-of-court solution was found with its creditors. The proposed deal with its previous shareholders, including long-time private equity backer Webster Capital Partners, aimed to reduce the debt load to $600 million in exchange for equity. The documents also mention that the deal would provide BayMark with around $26 million and ensure that no single lender (or their affiliates) would own more than 15% of the voting equity.
"This transaction positions BayMark for continued investment in our teams, treatment facilities, and care delivery capabilities to meet the evolving needs of individuals seeking treatment," added Salomon.
Bloomberg reporting cites BayMark's creditors as SLR Investment Corp., Ares Management Corp., and Oaktree Capital Management.
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