Hospital management company, Universal Health Services Inc. is close to acquiring mental health facilities operator Psychiatric Solutions Inc. in a cash deal, worth nearly $2 billion.

Universal Health Services will be paying $33.75 in cash for each share, while private equity firm Bain Capital, also participating in the auction Sunday, failed to put in a top bid.

The bid price means Psychiatric Solutions that closed at $32.63 on Friday on Nasdaq, is valued at nearly $2 billion. Psychiatric Solutions’ market capitalization was around $1.87 billion at Friday’s close.

Sources speaking on the condition of anonymity due to the private nature of the talks said, Universal Health Services Inc. ending the bidding war with Bain Capital LLC, has agreed to acquire Psychiatric Solutions for around $2 billion. The hospital operator boosted its offer by 25 cents after Bain mounted an eleventh hour challenge during Psychiatric Solutions’ board meeting yesterday.

Further, the sources add, Psychiatric Solutions will more than double its revenue from Universal Health’s mental health-care facilities, which behavioural health-care operations generated $1.3 billion in 2009, while Franklin, Tennessee-based Psychiatric Solutions had $1.8 billion of revenue for the same period.

In March, Psychiatric Solutions confirmed hiring Goldman Sachs as its financial adviser after it was approached by third parties over a possible acquisition of the company.

Bain declined comment, even as Psychiatric Solutions and Universal Health Services could not be reached for comment, immediately.

Psychiatric Solutions that owns and operates mental-health facilities in the US, Puerto Rico and U. S. Virgin Islands, began exploring a sale months ago in the form of a management- led buy-out.

Psychiatric Solutions rose 63 cents or 2% to $32.63 in Nasdaq Stock Market trading, gaining 54% this year.