The market conditions were better in March when Nashville-based HCA priced its IPO at $30 per share, which was the top of the range that it had estimated in its prospectus. The company and its still-majority owners—three private equity groups and members of the Frist family—also sold 1.8% more shares than initially expected. The company’s shares have held up even as the broader market has declined. HCA’s shares closed last week at $32.25, down 96 cents on the day, but up 7.5% from its IPO price. On March 9, the day that HCA priced its IPO, the Standard & Poor’s 500 index closed at 1,320.02. Through its close on June 24, the index has fallen by 3.9%, to 1,268.45. All trading figures are according to Commodity Systems.
After deducting expenses, Vanguard said its net proceeds were $417.6 million. The net proceeds will be used to pay off its senior discount notes due 2016, including a 5% redemption premium the company must pay for redeeming the notes before maturity. Vanguard could raise up to $67.5 million in additional gross proceeds if the investment banks underwriting the IPO make full use of their options to buy up to 3.75 million shares.
Delaying the IPO, and thereby delaying early payment of the 2016 notes, would have cost Vanguard about $4 million a month, according to Dean Diaz, a vice president and senior credit officer for Moody’s Investors Service.
Vanguard’s shares began trading June 22 on the New York Stock Exchange under the symbol VHS. Vanguard’s shares closed at $17.95, up one cent on the day and down five cents since the IPO, according to Commodity Systems. Unlike HCA’s IPO, Vanguard’s private-equity backers, the Blackstone Group and Morgan Stanley Capital Partners, and its management team did not sell any shares in the IPO. Those shareholders continue to control a majority interest in the company.