Envision, parent of the largest U.S. provider of ambulance services formerly known as Emergency Medical Services Corp, will price its IPO on Tuesday, Aug. 13, a source says. It will likely go public the next day. Envision is currently looking to sell 35 million shares at $20 to $23 each via joint bookrunners Goldman Sachs, Barclays, BofA Merrill Lynch and Citigroup, according to an SEC filing dated July 31.
The Greenwood Village, Colorado-based company provides physician-led outsourced medical services in the U.S.; it has more than 20,000 affiliated clinicians. Envision’s net income rose 23% to $9.6 million for the quarter ended June 30, according to SEC filings. Revenue grew 12% to $899.2 million for the same time period. Envision’s debt has increased since it was acquired by CD&R. Total long-term debt stood at $2.7 billion as of June 30. This compares to $421.3 million in debt for the year ended Dec. 31, 2010. CD&R announced its takeover of the company just months later in February 2011.
Clayton, Dubilier & Rice, a New York private equity firm, closed its buy of the company, which was then called Emergency Medical Services Corp., the following May in a deal valued at $3.2 billion. CD&R and company management invested $915 million of equity, SEC filings say. CD&R’s portion was $885 million equity, a source says.
The investment came from CD&R’s eight fund, which collected $5 billion in late 2009. The buyout shop is currently out fundraising for its ninth pool, which also has a $5 billion target, peHUB has reported.
In October 2012, Envision issued $450 million of PIK Notes and used the proceeds to pay out a special cash dividend to company stockholders. Moody’s Investors Service said at the time that the dividend came to $428 million. Envision said it plans to use $708.5 million in expected IPO proceeds to redeem the $450 million in PIK notes.
CD&R owned 97.6%, or 128.9 million shares, of Envision before the IPO, according to SEC filings. CD&R appears to have received nearly half of its investment back with the 2012 dividend.
The PE firm is not selling stock in the Envision IPO. After the offering, CD&R’s stake will fall to about 75% (assuming the greenshoe is exercised). At $21.50 a share, the mid-point of its IPO range, CD&R’s holding would be valued at roughly $2.8 billion.
Including the dividend, and paper gains, the PE firm stands to make roughly 3.6x its investment.
CD&R declined comment.
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