Concerned about market conditions and its own financial footing, HealthPort officials have postponed plans to go public.
In a brief statement released before the opening of the New York Stock Exchange on Thursday, officials of the Alpharetta, Ga.-based company announced they would not seek an initial public offering of stock designed to net the company roughly $100 million. The company had been due to open on Nasdaq that day under the ticker symbol “HPRT.”
Company officials cited market conditions as the reason for the delay, and did not set a timetable for future plans.
Analysts noted that while net revenue has been rising over the past few years, HealthPort has lost $8.9 million through the third quarter of 2009 on sales of $193.2 million (though that was less than the $12.9 million in losses reported during the same period of 2008). The company also faces tough competition from much larger, more established competitors like Allscripts-Misys, McKesson and Cerner.
"They're losing money and they have a lot of competition for their product," said advisory firm IPO Boutique Senior Managing Partner Scott Sweet in a news report issued Thursday by Reuters.
Formed in 2007 through the merger of Smart Document Solutions and Companion Technologies, HealthPort merged in 2008 with Burlington, Mass.-based ChartOne to offer a diverse mix of revenue cycle management, document and records management, recovery audit contractor (RAC) and release of information (ROI) services for the healthcare field. In filing for the IPO, the company had claimed a 20 percent share of the ROI services outsourcing field and was looking to capitalize on the increase in demand for electronic health records, the complexity of federal initiatives to control healthcare costs and advances in information technology.
The company had planned to issue 6 million shares valued at between $14 and $16, to raise between $80 million and $100 million.
In recent months, the company had achieved certification from Executive Health Resources for its RACPro solution, launched an online education community for health information management and cancer registry professionals and signed software contracts with Resurrection Health Care of Chicago and Bridge Community Clinic in Wausau, Wis.
“HealthPort remains committed to leading the way as a provider of technology and strategic solutions for healthcare partners as the company seeks to improve patient care, business processes, and financial results by providing quality service, proven solutions and trusted expertise,” the company said in a press release.
HealthPort is the fourth company to postpone or cancel an IPO during the past month, following power infrastructure company AEI, skilled nursing facility owner Aviv REIT and Texas-based PlainsCapital Bank. Conversely, computer network security provider Fortinet, Inc., saw its shares rise 33 percent on its first day of trading on Wednesday.