Signify Health is looking to go public and, unlike several of its peers in recent months, plans to do it in the traditional way: an initial public offering.
The company, which provides a value-based care platform that uses advanced analytics and other technology to shift health services toward the home, is looking to raise $100 million in its IPO, according to documents filed Tuesday with the U.S. Securities and Exchange Commission (SEC).
The number of shares to be offered and the price range for the proposed offering have not yet been determined. Signify Health intends to list its Class A common stock on the New York Stock Exchange (NYSE), under the ticker symbol SGFY.
Signify Health filed confidentially in October. Goldman Sachs, J.P. Morgan, Barclays, Deutsche Bank, BofA Securities, UBS Investment Bank, Baird, Piper Sandler and William Blair are the joint bookrunners on the deal.
The technology company, which launched in December 2017, supports in-home care and provides care management services.
Signify's focus is to support value-based payment programs by aligning financial incentives around outcomes, providing tools to health plans and healthcare organizations designed to assess and manage risk and identify actionable opportunities for improved patient outcomes, coordination, and cost-savings.
Its customers include health plans, governments, employers, health systems, and physician groups. The company's episode payment platform managed $6.1 billion of spending under the Medicare Bundled Payment for Care Improvement Advanced (BPCI-A) program in 2019, and the BPCI-A episodes it managed initiated in the 4Q19 resulted in approximately 15% greater discharges home from acute-care facilities and approximately 10% lower readmissions, according to the company in its S-1 filing.
Its mobile network of providers entered over 1 million unique homes to evaluate individuals in Medicare Advantage and other managed care plans in 2019.
"We believe that these core businesses have enabled us to become integral to how health plans and healthcare providers successfully participate in value-based payment programs, and that our platform lessens the dependence on facility-centric care for acute and post-acute services and shifts more services towards alternate sites and, most importantly, the home," the company said.
Signify Health executives also said the company is a market leader in two fast-growing segments of the value-based healthcare payment industry: payment models based on individual episodes of care and in-home health evaluations.
The company serves 47 Medicare Advantage health plans ranging from the largest national organizations to smaller regional and provider-owned entities. And it serves thousands of healthcare provider organizations ranging from large integrated delivery systems to midsize and small urban and rural entities.
Signify Health a portfolio company of New York City-based PE firm New Mountain Capital. The IPO filing comes just a year and a half after the Dallas-based company merged with Remedy Partners.
In 2019, Signify Health acquired TAV Health to build its capabilities to address social determinants of health.
Signify’s total revenue was $502 million for the year ended Dec. 31, 2019, up 48% from $338 million in 2018, according to the S-1. For the nine months ended Sept. 30, 2020, its total revenue was $417 million. The company has sizeable losses, reporting a net loss of $28 million in 2019 and losses of $15 million in the nine months ending Sept. 30, 2020.
"We believe our financial model is attractive with highly recurring revenues, strong EBITDA margins and high cash flow conversion," the company said.
The COVID-19 pandemic significantly impacted the company's in-home health evaluations starting in March of last year. Signify resumed in-home visits beginning in July 2020 and leveraged its technology capabilities to quickly pivot to offering a virtual version of its in-person evaluations beginning in April 2020. Signify performed approximately 380,000 virtual evaluations and over 560,000 in-person evaluations, or a total of approximately 940,000 health evaluations in the first nine months of 2020.
"We believe we have demonstrated the ability to rapidly scale our customer base and operations and grow our business in our principal markets in large part due to the attractiveness of our services and our competitive scale in the market," the company said.
Signify Health works with 26 of the top 50 Medicare Advantage plans and it has increased the number of annual in-home evaluations conducted from approximately 390,000 in 2015 to nearly 1.1 million in 2019, representing a compound annual growth rate of 29%.
The company's financial success faces several risks, according to the S-1, including business operations being disrupted by the COVID-19 pandemic, Signify's revenues and operations are dependent upon a limited number of key customers, and a large portion of its revenues are substantially dependent on certain key government programs, primarily BPCI-A.