BrightSpring Health Services is pursuing an initial public offering (IPO) and plans to begin trading on NASDAQ. The company, which does not yet have a ticker symbol, is looking to raise $ 100 million through the IPO.
BrightSpring is a home and community health services platform. The company entered the hospice business in February with the $ 775 million acquisition of Abode Healthcare from private equity firm Summit Partners. Brightspring entered into a second hospice palliative care deal in September, acquiring North Carolina-based Dare County Home Health & Hospice for $ 2.9 million.
“By providing a suite of complementary and purpose-built services, our model of care is designed to meet more patient needs and better integrate health service delivery to improve patient outcomes and experiences, while reducing overall costs, “BrightSpring wrote in a filing with the United States. Security and Trade Commission.
BrightSpring is making a concurrent offer of a so far undisclosed percentage of tangible equity units. These often come in the form of prepaid stock purchase contracts.
As a result of the offer, BrightSpring’s current backers – KKR Phoenix Aggregator LP and Walgreens Co., a subsidiary of Walgreens Boots Alliance, Inc. (NASDAQ: WBA) – will retain a percentage of shares yet to be determined.
Goldman Sachs, Jeffries, BMO Capital Markets and Morgan Stanley are among the 14 financial institutions that have subscribed to the IPO. Sources from several of these organizations told Hospice News that they could not comment on an ongoing deal. BrightSpring also did not comment.
Founded as ResCare in 1974, BrightSpring focuses on serving patient populations with complex and specialized care needs across the continuum of care and also provides pharmaceutical and diagnostic services through subsidiaries such as Adoration Health LLC, Pharmacy Alternatives LLC and more.
BrightSpring reported 23.3% revenue growth in 2020, an increase of $ 1.1 billion to $ 5.6 billion across all of its business segments, which include healthcare services home and community, or provider services, and pharmacy solutions. Net profit reached $ 21.2 million last year, up 129.8%.
In the SEC filing, the company cited a combined $ 1.5 trillion market opportunity across all of its lines of business as a factor in its decision to go public. BrightSpring sees growth opportunities through organic expansion, SEO synergies across its service lines, emerging value-based payment models and strategic acquisitions, according to the filing.
The company closed 12 transactions each year between 2018 and 2020. In the second quarter of 2021, BrightSpring completed six acquisitions, including the Abode and Dare County transactions.
Acquisitions accounted for the bulk of its nearly $ 2.5 billion revenue growth from 2018 to 2020, BrightSpring said in SEC documents.
“Our platform and financial profile also benefit from a long experience in mergers and acquisitions and a proven ability to seek, execute and integrate strategic and accretive acquisitions in several fragmented sectors,” BrightSpring said in its case. “We are able to selectively target attractive and rewarding acquisitions that we believe will continue to make a significant contribution to the long-term success of the business. ”
BrightSpring also expects to benefit from the strong demographic tailwinds of an aging population that have propelled industry-wide growth. In the United States, about 10,000 people become eligible for Medicare each year, a trend that began in 2011 and is expected to continue until 2030, according to the Kaiser Health Foundation. A substantial majority will have a serious or chronic health problem.
The company cited certain risks that could limit or hinder the execution of its growth strategy. BrightSpring has significant debt, totaling nearly $ 3.5 billion, which means the company has to spend “a substantial portion” of its cash flow to repay that amount.
Most of the risks identified by BrightSpring reflect challenges that impact the healthcare industry as a whole, such as the highly competitive market, labor shortages, potential policy or reimbursement changes. Medicare, as well as uncertainties related to the COVID-19 pandemic.
“We may be more vulnerable to the effects of a public health emergency than other companies because of our complex patient populations and the physical proximity required by our operations,” the SEC file says.