NEW YORK (Reuters) – Emdeon Inc (EM.N) priced shares for $15.50 in its initial public offering on Tuesday, at the top of the estimate range, and increased the number of shares sold by 10 percent, one of the deal’s underwriters said.
Emdeon sold 23.7 million shares and raised about $365.7 million in an IPO led by Morgan Stanley (MS.N), Goldman Sachs & Co, (GS.N) UBS Investment Bank (UBSN.VX) and Barclays Capital (BARC.L).
Nashville-based Emdeon, a provider of payments and billing systems to U.S. health care providers, had estimated the shares would price at $13.50 to $15.50 per share.
Emdeon becomes the latest private equity backed firm to attempt an IPO as buyout firms seek to unload portfolio companies.
About half the shares sold were held by current shareholders, which include two private equity firms — General Atlantic Partners and Hellman & Friedman, which bought the firm in 2006.
Emdeon’s software links health care providers such hospitals, pharmacies and doctors with private and public insurers, such as Medicare and Medicaid.
The company is well positioned to take advantage of the pressure on health care providers to contain costs, an analyst said.
“With the Obama health plan being debated, win or lose, Emdeon is highly likely to come out a winner either way,” said Scott Sweet, a senior managing partner at advisory firm IPO Boutique.
“Whatever the outcome is, the cost benefits are back office administrative benefits.”
Emdeon had revenues of $444.4 million in the six months ended June 30, 2009, up 5 percent over the year earlier period, while net income rose 115.8 percent over the same period.
Emdeon will use its share of the IPO’s proceeds — about $157 million — to pay its early investors, as well as repay debt and make possible future acquisitions, according to a regulatory filing.
Last month, it acquired eRx Network LLC, a provider of electronic pharmacy healthcare solutions.
Emdeon’s IPO is the third largest of the year in the United States, excluding those by real estate investment trusts.
Emdeon shares are set to begin trading on the New York Stock Exchange on Wednesday under the symbol “EM”.
(Reporting by Phil Wahba; Editing by Gary Hill, Bernard Orr)