BrightSpring Health Services Inc.’s stock slid 9% in its trading debut on Friday, after the company’s initial public offering priced at $13 a share, below its proposed range of $15 to $18.
The Louisville, Ky.-based company, which offers home- and community-based services, sold 53.3 million shares to raise $693 million. With 171.2 million shares expected to be outstanding once the deal closes, the company has a valuation of $2.2 billion.
The stock of the company, which is backed by KKR & Co.
KKR,
is trading on Nasdaq under the ticker BTSG
BTSG,
Goldman Sachs was the lead underwriter in a team of 15 banks that worked on the deal.
The company focuses on patients with complex health needs, such as senior and specialty patients, via a network of 10,000 clinical providers and pharmacists.
Revenue rose 15.3% in 2022 to $7.7 billion, but the company swung to a loss of $53.9 million after chalking up net income of $49.8 million in 2021.
Concurrent with the IPO, BrightSpring offered 8 million of its 6.75% tangible equity units at $50 per unit. Underwriters have the option to purchase an additional up to 8 million shares in the next 30 days and a 13-day option to purchase up to an additional 1.2 million units.
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The deal comes a day after the debut of cancer-drug company CG Oncology Inc.
CGON,
which nearly doubled in its first day of trade in a positive sign for the IPO market.
Irving, Calif.-based CG Oncology closed at $37.17, up 96% from its issue price of $19. That deal priced $1 above its proposed price range of $16 to $18 and the company upsized the offering to 20 million shares from earlier plans to offer 17 million.
The fact that BrightSpring priced below range suggested some investor pushback, and its weak first-day performance is expected to take the air out of the recent excitement at signs the IPO market is thawing after a deep freeze in 2023.
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The Renaissance IPO ETF
IPO
has gained 25% in the last 12 months, outperforming the S&P 500
SPX,
which has gained 20%.
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