Vanguard Health Systems Inc., which is controlled by the Blackstone Group, on Tuesday sold 25 million shares for $18 each, raising about $450 million, Reuters wrote. It had previously filed to sell shares for $21 to $23 each and was expected to price its IPO after the close of U.S. markets on Wednesday. Underwriters on the Vanguard IPO are being led by Bank of America Merrill Lynch, Barclays Capital, Citi, Deutsche Bank Securities and JPMorgan, Reuters reported.
(Reuters) – Vanguard Health Systems Inc, controlled by private equity firm Blackstone Group LP (BX.N), accelerated the pricing of its initial public offering and raised less money than planned.
The hospital operator on Tuesday sold 25 million shares for $18 each, raising about $450 million, an underwriter said.
It had previously filed to sell shares for $21 to $23 each and was expected to price its IPO after the close of U.S. markets on Wednesday.
But difficult markets caused a change of plans and Reuters IFR reported earlier on Tuesday that Vanguard’s IPO pricing had been moved and the shares were unofficially expected to price between $18 and $19.
The hospital operator is the latest of several private equity-owned healthcare companies to seek capital in U.S. public markets as concerns about a slowing U.S. economy spur investors toward defensive, cash-generating companies.
In March, Tennessee-based hospital operator HCA Holdings Inc (HCA.N) raised $3.79 billion in the biggest U.S. private equity-backed IPO ever in the United States.
Earlier this month sources told Reuters that Toledo, Ohio-based HCR ManorCare could go public after the September U.S. Labor Day holiday in a deal that could give the nursing home and assisted living facility operator an enterprise value of up to $2 billion.
Blackstone in 2004 purchased a majority equity interest in Vanguard for $1.75 billion.
Leading up to the IPO the firm owned 66 percent of Vanguard. It did not sell any shares in the IPO and was expected to retain a stake of close to 40 percent in the company, according to a filing with the U.S. Securities and Exchange Commission.
The Nashville, Tennessee-based company said it would use proceeds from the offering to repay debt and to pay a net liability due to its sponsors.
Founded in 1997, Vanguard operates around 26 hospitals in Arizona, Illinois, Michigan, Texas and Massachusetts. In the nine months ended March 31, Vanguard posted a net loss applicable to stockholders of $1 million on total revenue of $3.4 billion.
Underwriters on the Vanguard IPO are being led by Bank of America Merrill Lynch, Barclays Capital, Citi, Deutsche Bank Securities and JPMorgan.
The shares are expected to begin trading on the New York Stock Exchange on Wednesday under the symbol “VHS”. (Reporting by Clare Baldwin; editing by Carol Bishopric and Andre Grenon)