A temporary nurse-staffing agency wants to parlay the nation's alleged nursing shortage into big bucks.
Last week, Cross Country, Boca Raton, Fla., filed a registration statement with the Securities and Exchange Commission to raise up to $115 million in an initial public offering of stock. The 26-year-old company provides nurses on a temporary basis to hospitals around the country. Cross Country plans to use the proceeds of the IPO to pay off debt.
An HHS report issued in February warned that the country faces a nursing shortage. Although the number of nurses increased from 1996 to 2000, the increase was lower than in previous periods, according to the report. Three months later, however, a report released by the Congressional Research Service said a nursing shortage is years away (June 11, p. 4).
The nursing shortage-to whatever extent it exists-is a mixed blessing for Cross Country. Hospitals need help filling open nursing slots, but the staffing firm, too, must contend with the tight labor market.
"Currently, there is a shortage of qualified nurses in most areas of the U.S., and competition for nursing personnel is increasing," the company said in its registration statement. "At this time we do not have enough nurses to meet our clients' demands. This shortage of nurses limits our ability to grow our staffing business."
American Mobile Healthcare, San Diego, is Cross Country's principal competitor, according to the registration statement.
Cross Country is owned by Charterhouse Equity Partners and Morgan Stanley Private Equity, both based in New York. It has 5,650 full- and part-time employees and reported net income of $4.6 million on revenue of $368 million for the year ended Dec. 31, 2000. As of March 31, the company reported $187 million in debt.
Company officials said they were unsure how many shares would be offered and when the stock would start trading on the NASDAQ exchange; however, it will be at least 30 days, they said.