Blackstone-Backed Team Health Prices Low IPO

NEW YORK (Reuters) – The latest initial public offering backed by private equity firm Blackstone Group (BX.N) priced shares below expectations on Tuesday, and sold fewer shares than anticipated, according to an underwriter.

Hospital staffing company Team Health Holdings Inc priced shares at $12, each, and raised about $159.6 million. It had originally expected to sell 20 million shares priced between $14 and $16.

The Knoxville, Tennessee-based company, which is 92 percent owned by funds affiliated with private equity investor Blackstone, provides hospital staffing and other administrative services to 550 U.S. hospitals, according to a prospectus filed by the U.S. Securities and Exchange Commission.

The company said it estimates the size of the U.S. outsourced professional healthcare staffing market to be about $50 billion.

Team Health’s net revenue minus a provision for uncollectables rose 7.5 percent to $1.1 billion, compared with a year ago, in the nine months ended Sept 30. The company’s net earnings rose 10.3 percent to $55.2 million in the same period.

Underwriters are led by Bank of America Merrill Lynch, Goldman Sachs & Co, Barclays Capital, and Citi. If they sell more than 20 million shares of common stock, they have the option to purchase an additional 1.6 million shares from the company and an additional 1.4 million shares from the selling shareholder.

(Reporting by Clare Baldwin; Editing by Gary Hill)