BrightSpring Health Services Inc. priced its $692.9 million initial public offering below the range at which the shares were marketed, a disappointing outcome that could dent the nascent mood of optimism in equity capital markets.
The community-based health-care services provider backed by KKR & Co. sold 53.3 million shares at $13 each, and concurrently sold tangible equity units at a coupon of 6.75%, according to a statement late Thursday, confirming a Bloomberg News report. Including the units, the offering raised about $1.1 billion.
BrightSpring had marketed the shares for $15 to $18, and had offered the 8 million tangible equity units, or mandatory convertible securities, at a fixed price of $50 each, according to its filings with the US Securities and Exchange Commission.
At the IPO price, BrightSpring has a value of about $2.2 billion based on the outstanding shares in the filing. Including stock options, restricted stock units and assuming the conversion of the tangible equity units, the company's fully diluted value is about $2.9 billion, according to data compiled by Bloomberg.
BrightSpring's pricing below the marketed range could potentially undercut a fledgling rebound in US IPOs, which have begun to emerge from a two-year lull.
Last week, investors in Kazakhstan mobile app company Kaspi.kz raised about $1 billion in an offering of American depositary shares, which are now trading below its IPO price. Amer Sports Inc., the maker of Wilson tennis rackets and Salomon ski boots, said in a filing Monday that it's targeting as much as $1.8 billion in an IPO expected next week.
Louisville, Kentucky-based BrightSpring had a net loss of about $150 million on revenue of $6.45 billion for the nine months ended Sept. 30, according to its filings. After the IPO, BrightSpring will be controlled by KKR and an affiliate of Walgreens Boots Alliance Inc., the company said.
BrightSpring is granting underwriters the option to purchase an additional 15% of the base deal for both the common stock and the tangible equity units. It plans to use proceeds from the IPO to repay debt and for general corporate purposes.
The offering is being led by Goldman Sachs Group Inc., KKR, Jefferies Financial Group Inc., Morgan Stanley, UBS Group AG, Bank of America Corp., Guggenheim Securities and Leerink Partners, according to the filings. The company's shares are expected to begin trading Friday on Nasdaq Global Select Market under the symbol BTSG.