Updated Thursday, January 18 at 2:30 pm ET
BrightSpring Health plans to raise approximately $960 million in an initial public offering that would value the company at about $3 billion.
The home and community-based healthcare services provider said it would sell 53.3 million shares of its common stock between $15 and $18 each to raise between $800 million to $960 million. Most of the proceeds will be used to pay down debt, the company said in a press release issued Thursday.
The company also is planning to raise $400 million by offering 8 million tangible equity units at $50 per unit to raise as much as $1.36 billion total.
With 171.19 million shares outstanding for the company, BrightSpring will go public with a market capitalization of about $2.82 billion, MarketWatch reported.
The company kicked off 2024 by renewing its plans to go public, signaling a potential end to the dry spell in the healthcare IPO market. BrightSpring Health Services filed plans to go public with the U.S. Securities and Exchange Commission on January 3.
Bloomberg reported in September that the company planned to raise $1 billion in an initial public offering. The company plans for its shares to trade on the Nasdaq under the symbol BTSG.
Goldman Sachs Group, Jefferies Financial Group, Morgan Stanley, UBS Group AG, Bank of America Corp., Guggenheim Securities and Leerink Partners are listed in the top tier of underwriters for the listing. Six banks and KKR itself are also listed in the filing as underwriters.
Based in Louisville, Kentucky and backed by KKR, BrightSpring Health filed for an IPO publicly in October 2021 and had planned to list later that year, Bloomberg reported. The company shelved its plans in 2022 as an uncertain economy put a damper on the IPO market.
KKR bought BrightSpring in a $1.32 billion deal in 2019 and merged it with PharMerica Corp., an affiliate of Walgreens Boots Alliance, to create a healthcare platform with comprehensive care capabilities across clinical, pharmacy and non-clinical support services.
The company says it delivers complementary pharmacy and provider services to complex patients in lower-cost home and community settings. BrightSpring Health operates in 50 states, serving more than 400,000 patients daily through its approximately 10,000 clinical providers and pharmacists, the company said in the SEC filing. Services are provided from 9,500 clinics, offices and customer locations.
"Our model focuses on delivering high-touch and coordinated services to medically complex clients and patients, which is a large, growing, and underserved population in the U.S. healthcare system," the company said. BrightSpring Health estimates these high-need and high-cost senior and specialty patients make up a $1 trillion market opportunity.
"The chronic conditions and long-term health needs of these patients not only represent an outsized share of health care spend today, according to RAND, but we believe that they are expected to also drive a disproportionate share of future expenditures. Americans with five or more chronic conditions make up over 10% of the population and account for 40% of total health care spending, on average spending 10 times more on health services than those without chronic conditions," the company wrote in the filing.
These patients most often require both pharmacy and provider services to achieve the best outcomes, but must often navigate disjointed and separately-administered health services.
For the nine months ended September 30, 2023, BrightSpring's total revenue grew 12.2% to $6.5 billion, compared to $5.7 billion during the same period a year prior. During the same period, the company reported a net loss of $148 million, compared to a profit of $2.3 million during the first nine months of 2022.
The company reported $7.7 billion in revenue in 2022, up 15.3% or $1 billion from a year prior.
The macroeconomic environment effectively put a freeze on the IPO market for health tech companies during the past three years. There were 20 digital health companies that went public in 2021 and only two in 2022. There were zero digital health IPOs in 2023.
Healthcare payment software maker Waystar also signaled plans to go public last year. The company, formed in 2017 by the merger of revenue cycle management companies Navicure and ZirMed, confidentially filed for an IPO in August, Reuters reported.