HCA Holdings will spend $750 million to buy back 9.4 million of its common shares from Kohlberg Kravis Roberts & Co., one of the main investment groups that took the hospital giant private in 2006, then public again in a 2011 initial public offering.
The buyback at $80.12 per share, which was nearly HCA's closing price Tuesday, will leave KKR with about 5.6 million shares outstanding. Before the announcement, KKR was HCA's fourth-largest institutional shareholder, with 14.9 million shares or 3.7% of HCA's common stock, according to Morningstar.
Nashville-based HCA said in a regulatory filing Wednesday that it would finance the buyback through a $3 billion share repurchase allotment that was approved by the HCA board of directors in October.
HCA did not respond to a request for comment, and gave no indication in its regulatory filing why it was buying back the shares. KKR declined to comment.
KKR was instrumental in a $21 billion leveraged buyout of then-public HCA in 2006. The other groups were the Thomas Frist family, Bain Capital and Merrill Lynch Global Private Equity. It was one of the largest LBOs ever.
In April 2015, HCA agreed to buy back 3.8 million shares from Bain Capital affiliates for about $294 million.
In 2011, the groups returned HCA to public ownership through a $3.8 billion IPO.
HCA's share price has gained about 20% since the start of the year. It began 2016 at $67.63 per share and closed Tuesday at $80.93. That's still short of the $94.81 per share high it achieved on July 13.
But HCA's stock has recovered much more quickly than some other hospital companies, notably Community Health Systems and Tenet Healthcare Corp., which sold heavily last summer on rising wages and flattening volumes from the Affordable Care Act.
Earnings at HCA Holdings rose modestly in the first quarter on increases in emergency room visits, outpatient surgeries and admissions to its 168 hospitals.
HCA, the nation's largest hospital chain, posted income before taxes in the first quarter of $1.1 billion on revenue of $11.1 billion, compared with income before taxes of $1.08 billion on revenue of $10.3 billion in the prior-year quarter.