HPS Investment Partners and Capital One Take Control of Discovery Behavioral Health via Debt-for-Equity
June 2, 2026
Discovery Behavioral Health (DBH) entered a major restructuring after defaulting on roughly $280 million of debt, following a dispute over its debt-to-earnings calculations. Lenders led by HPS Investment Partners and Capital One seized control, ousting the board and CEO and effectively converting debt into ownership, with a new CEO (Pete Clarke) introduced in the subsequent announcement.
- Buyers
- HPS Investment Partners, Capital One
- Targets
- Discovery Behavioral Health
- Sellers
- Webster Equity Partners
- Industry
- Healthcare Services
- Location
- California, United States
- Transaction Type
- Recapitalization
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