HCA To Pay $2 Billion Dividend to PE Backers Including Bain, KKR

I’m trying to keep the dividend stories to a minimum but today’s is too hard to resist. HCA Inc., which is owned by KKR and Bain Capital, is planning to pay a $2 billion dividend to its PE backers.

Nashville-based HCA, a hospital operator, said Tuesday in its earnings release that it plans to make a $2 billion distribution in fourth quarter to the company’s  existing shareholders and holders of vested stock options. HCA said in a separate statement that it plans to sell $1.525 billion in notes, and use borrowings, to pay the dividend.

Four years ago, Bain and KKR were part of a group that bought HCA in a $33 billion deal. In May, HCA filed to go public in an IPO that could raise as much as $4.6 billion. However, HCA has sat in registration since then and has yet to provide terms or a price range for the IPO.

The $2 billion dividend won’t be HCA’s first. In January, HCA paid its shareholders about $1.75 billion in distributions, according to the May S-1 filing. HCA made another $500 million distribution to shareholders in May, the filing said.

Several other companies, including PETCO, Dunkin’ Brands and Burlington Coat Factory, are also planning to pay large dividends to their PE backers. Bain owns Burlington Coat Factory, which is planning to raise a $1 billion loan to partly pay a dividend to its shareholders.

HCA officials couldn’t be reached for comment.