Emdeon Business Services has announced an Initial Public Offering of its stock on Aug. 12, in hopes of raising up to $332 million.
The Nashville-based provider of revenue cycle management and claims clearinghouse services announced Tuesday that about 21.45 million shares of Class A common stock would be made available, with prices expected to fall between $13.50 and $15.50. According to a company press release, 10.725 million shares are being offered by the company and another 10.725 million are being offered by selling stockholders, and underwriters have an option to purchase an additional 3.22 million shares from stockholders to cover any over-allotments.
The stock price will be set on Aug. 11, with shares trading the next day under the symbol 'EM.' Morgan Stanley, Goldman Sachs, UBS Investment Bank and Barclays Capital are the deal-s underwriters.
Reflecting the volatility of the market, the expected amount to be raised is lower than the $460 million announced by company officials when they filed papers in September 2008.
According to published reports, only 15 IPOs have been registered this year, down from 44 at this time last year and 160 in 2007.
Earlier this month, Emdeon acquired Fort Worth, Texas-based eRx Network, LLC, a vendor of electronic pharmacy healthcare solutions, in a bid to enhance its e-Prescribing and pharmacy claims management offerings and compete with Surescripts. And in May, the company acquired The Sentinel Group, a Lake Forest, Ill.-based developer of data analytics solutions and technology designed to ferret out healthcare fraud and abuses.
The company's software processed 3.7 billion transactions last year, and revenues were reported at $808.5 million, with adjusted EBITDA of $182.8 million and generated net income of $16 million. Based on the first half of this year, earnings are expected to jump to $12 million on revenue of $851 million. The company's network reportedly includes 1,200 payers, 500,000 providers, 5,000 hospitals, 77,000 dentists and 55,000 pharmacies.
Emdeon expects to use proceeds from the IPO to purchase some interests held by private equity owners and for working capital and general corporate purposes, including repayment of debt and funding future acquisitions.