Ardent Health's second attempt at an initial public offering didn't go as well as planned, but CEO Marty Bonick said he still has big plans for growth.
Ardent, a 30-hospital system, sold 12 million shares at $16 each in its IPO. The offering raised $192 million — well below early projections of $286 million to $314.6 million. Per-share prices debuted Thursday on the New York Stock Exchange at $15, and shares continued to trade below $16 for most of the day. Prices landed at $16.06 per share at market close.
Related: Ardent Health raises $192 million in downsized IPO
Bonick said the company's growth plans won't be affected. Brentwood, Tennessee-based Ardent said in recent Securities and Exchange Commission filings it will use proceeds for working capital, capital expenditures and debt repayment, plus expansion through acquiring complementary businesses, products, services or technologies.
In an interview, Bonick discussed those plans and why an IPO made sense for Ardent. The interview has been edited for length and clarity.
Did the downsized IPO surprise you?
There's a lot of calculus that goes into this process, but we're excited about the performance of our company today and the trajectory of where we're going. I always tell our team that these things are a marathon, not a sprint, and this is just the start of a new chapter. Any one day in training preparing for a marathon is not going to make or break your race, and any first day in trading is not going to make or break this company.
I think a lot of people get focused on a price, and that's not really what we're focused on. Our purpose as a company is people caring for people. We've got a very strong focus on our patients as consumers and continue to execute on our strategy. If we continue to execute on our strategy, we know that good clinical outcomes are going to lead to good financial outcomes, and we believe the market will respond accordingly to that.
Are you feeling disappointed after the first trading day?
There's been a ton of work that's been put into this to prepare for this moment, and we know that this [first day of trading] is just the start of a great new chapter for our company.
The IPO was all about raising proceeds for continued growth and expansion of the company, so we weren't looking at market timing so much as putting in the energy to be a good strong public company and just generating the funds to be able to continue to expand our mission.
What are your thoughts on having public shareholders?
It's a great responsibility, but it's not that different than where we are today. As a private company, we have equity investors that are part of our company and part of our trajectory of growth, and now we have public investors to go along with that. Life doesn't really change from our focus in terms of running and operating the company.
Why go the IPO route?
Equity Group Investments in Chicago has been partnered with us for nine years, and they've more than doubled the size of the company since they've been invested with us. They see the opportunity to grow this company and continue on the trajectory that we've been building from. The public markets, for us, are just the currency to build awareness of the good we're doing in communities across the country.
Will Equity Group Investments remain involved long term?
They are known to be long-term holders of their companies and equity, whether that's in a private or public environment. Today they are our largest shareholder, and we look forward to their continued involvement in the company. They understand the growth trajectory that this company has. These were all primary funds that were raised to help aid the company's growth. They did not take any proceeds out of this.
Why seek an IPO again after pulling back in 2020?
The need for capital wasn't so much the issue as the opportunity for us to expand. For us, we knew that we would go public when we were ready. We put in the effort to be a strong public company as we move forward. We spent a lot of time centralizing and standardizing our processes so we can continue to build and grow as a company, and we know that there's a lot of opportunity and need. People have taken notice of the unique partnerships that we form in the communities we operate in.
Everybody knew that they had a role, whether that was our legal team, our accounting team, our operations team, our humans resources team. Our job is to make sure that those are working in harmony to lead to this outcome.
We've actually been planning this for the last couple of years to be ready for this moment.
Given the downsized IPO, will you need to pull back on expansion plans?
Not at all. We see growth in two major categories. One is to continue to invest in the communities that we're in, expanding our hospitals, the services we provide to the community and growing into the outpatient environment. Healthcare is moving in a fast direction from inpatient to outpatient. Both are important and we're going to continue to grow both. We see opportunities to expand access points in our communities, like urgent care, our continued primary care expansion, as well as more specialized services like ambulatory surgery centers and freestanding imaging centers and emergency departments.
Where do you want to expand?
We operate today in urban mid-sized markets, and we're going to continue to build in those size markets. If you think about the footprint that we have, we're located in Tulsa, Oklahoma; Albuquerque, New Mexico; and Amarillo, Texas. These are sizable markets where we can put deep root downs into those communities both from a hospital perspective and an outpatient perspective, as well as our physician and clinic infrastructure.
Our physician clinics are the front door to our health system, particularly in these mid-sized communities, but that's often the first encounter a patient's going to have when they come to us. It's often not the hospital. They'll start with the clinic and we build a relationship over the course of their lifetime.
We're also looking to build a continuum that goes beyond the bricks-and-mortar facilities. We're very focused on how technology can help leverage the platform that we've built and provide greater access to care for patients, whether that's through telemedicine and telehealth initiatives, through virtual nursing in our hospitals, remote patient monitoring, following patients across their lifetimes, so that they don't have to go and seek care from another provider. We want to be able to provide an ecosystem of care to meet their needs.
