BayMark Completes Out-of-Court Debt Restructuring 

Lewisville, Texas-based BayMark Health Services announced Monday that it completed its new-money recapitalization and a debt-for-equity exchange.

The deal, revealed earlier in the year, marks a notable stumble among scaled, private equity-backed addiction treatment providers. And it was not alone in having its equity seized by lenders. Other notable companies that have experienced something similar in the last several months include Discovery Behavioral Health and Summit BHC.

BayMark’s leadership says this development gives the company a much stronger footing for its current sustainability and planned future growth.

“This agreement reflects the strength of BayMark’s business and the confidence our financial partners have in our long-term vision,” Marshal Salomon, CEO of BayMark, said in a press release.

The release also states that the deal has the unanimous support of its creditors — the details of which were not discussed in the release. The company also maintains that all constituent relationships remain in force and that the care availability and quality has not changed.

The company has not responded to a request for comment.

Public documents released earlier detailing the change note that the company was once carrying a debt load of about $1 billion and was facing the prospect of bankruptcy unless it was able to find an out-of-court solution with its creditors. The then-proposed deal with the company’s previous shareholders, which would include its long-time private equity backer Webster Capital Partners, would trade equity for reducing its debt load to $600 million.

The deal, as detailed in the public documents, would give BayMark about $26 million as well. They also state that “At closing, no individual lender (or its affiliated lenders) will 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,” Salomon said in the release.

Reporting by Bloomberg states that BayMark’s creditors include SLR Investment Corp., Ares Management Corp. and Oaktree Capital Management. 

BayMark and Webster have reportedly been seeking a sale since at least 2020. Webster first invested in a BayMark’s predecessor in Jun 2015. Since then, the company has grown aggressively via de novo expansion and M&A. At the end of 2022, the company said that it operated more than 400 locations in the U.S. and Canada. Today, the company lists 275 unique locations, according to an analysis of the company’s listed locations data. Media reports also circulated of a potential sale in 2025. 

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