Vanguard Health Systems, Nashville, expects to sell at least 25 million shares in its initial public offering at a price of $21 to $23 per share, according to a securities filing.
Vanguard sets IPO price range
At the $22 midpoint of the price range, the 25 million shares would generate $550 million in gross proceeds. The filing also notes that the investment banks underwriting the offering have the option of buying 3.75 million shares; at $22, this would provide an additional $82.5 million in gross proceeds. After deducting the costs of the issue, Vanguard said in the filing it expects to realize net proceeds of $589.2 million if the underwriters take their full allotment of shares and the issue is priced at the midpoint.
The proceeds would be used to pay down Vanguard's 2016 discount notes, which currently have accreted a value of $488 million; make payments to its pre-offering shareholders; and other corporate purposes, according to the filing. If the offering is completed, Vanguard would still be controlled by its pre-offering shareholders: Blackstone Group, its majority stakeholder; private-equity funds controlled by Morgan Stanley Capital Partners; members of management; and other investors.
Vanguard first announced plans for a $600 million IPO in April. The company plans to list its shares on the New York Stock Exchange under the symbol VHS.
The filing did not indicate when the shares would be sold.
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