That resonant clang youre hearing could be from the opening bell on the New York Stock Exchange or Nasdaq after the latest healthcare company went public in 2007. But more likely its the sound of money jangling in the pockets of executives who will benefit from the recent string of healthcare initial public stock offerings.
As industry experts have said, the healthcare segment is a steady one that will continue to grow as an aging population requires these services in the future. This means there is money to be made in healthcareand this years IPOs prove that theory to be true.
Shareholders in general are the big winners, said Ben Rooks, vice president of healthcare investment banking at William Blair in Chicago. In many cases, senior managementespecially if they are foundersare going to see their options and equity worth a lot more money.
Thats certainly true for John Bardis, chairman, president and chief executive officer of Alpharetta, Ga.-based MedAssets, the group purchasing organization he founded in June 1999. MedAssets also specializes in revenue-cycle management. On Dec. 12the day before MedAssets began trading shares publiclyBardis acquired 47,550 shares of stock at $16 per share. The stock opened trading at $19.75 per share the next day, and climbed to $23.05 per share just a week later. Bardis owns beneficially about 2.49 million shares, which were valued at about $57 million on Dec. 21. Similarly, Jonathan Bush and Todd Park, founders of Athenahealth, a Web-based business services and electronic medical-records systems based in Watertown, Mass., will profit considerably from their companys IPO in September. The presidents cousin, Bush serves as chairman and CEO of Athenahealth, while Park is chief Athenista of the company. The two established the company as a physician practice-management company in San Diego 10 years ago.
Athena has been growing at a very good clip, said John Hallock, manager of public affairs and corporate communications. Hallock said the stock was priced originally at $14 to $16 per share and later re-priced at $16 to $18 per share. Touted as the years best debut by the Wall Street Journal, Athenahealth shares began trading at $30 per share and closed at $39 on Dec. 21.
This is good news for Bush, who owns 883,650 shares worth about $34.5 million, and Park, who owns 943,650 shares, valued at about $36.8 million.
Meanwhile, Boyd Hendrickson, chairman and CEO of post-acute-care operator Skilled Healthcare Group in Foothill Ranch, Calif., watched the stock of his company stay about the same since it began trading at $16 per share in May. Late on Dec. 21, the shares were trading at $15.61, making Hendricksons 815,736 shares worth about $12.7 million.
In September, IPC-The Hospitalist Co. filed its registration statement with the Securities and Exchange Commission for its proposed IPO. Established by physician Adam Singer, the North Hollywood, Calif.-based company provides management services to hospitalist practices in more than 300 facilities nationwide. Singer, the companys chairman, CEO and chief medical officer, owns about 4.5 million shares, according to SEC filings. Now in a silent period, the company would not comment for this story, but a September news release said the number of shares to be offered and the price range for the offering have not yet been determined.
And there are more examples like these to come in the near future, according to Rooks of William Blair.
Im very confidant there will be a robust healthcare IPO market in 2008, Rooks said.