KKR backed HCA 4.6 billion IPO, largest 2 years
Seems like PE firms may be back in action in terms of exit investments.
May 7 (Bloomberg) -- HCA Inc., the hospital chain bought four years ago in a $33 billion leveraged buyout led by KKR & Co. and Bain Capital LLC, filed to sell shares worth as much as $4.6 billion in an initial public offering.
HCA said it plans to raise a net $2.5 billion of the total by selling new shares and will use the proceeds to repay debt, according to a regulatory filing today. Ed Fishbough, a spokesman for HCA, declined to comment.
The stock offering would be the biggest U.S. IPO in two years. The hospital operator may profit from the health-care legislation President Barack Obama signed into law on March 23 that provides for coverage for millions of uninsured patients, said Sheryl Skolnick, an analyst at CRT Capital Group LLC in Stamford, Connecticut.
Private-equity firms spent $2 trillion, most of it borrowed, to buy companies ranging from Hilton Hotels Corp. to Clear Channel Communications Inc. in the leveraged-buyout boom that ended in 2007 and are now seeking to cut that debt before it matures.
HCA Inc. notes fell after the Nashville, Tennessee-based company filed for the initial public offering. The hospital operator’s 5.75 percent debt due in 2014 declined 4 cents to 92.94 cents on the dollar as of 8:58 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
$5.3 Billion
HCA’s owners put up about $5.3 billion to buy the company, according to a regulatory filing, funding the rest with loans from banks including Bank of America, Merrill Lynch & Co., JPMorgan Chase & Co. and Citigroup Inc.
The hospital chain’s purchase in 2006 shattered the record for the largest leveraged buyout, held since 1989 by KKR’s acquisition of RJR Nabisco Inc. HCA’s record was eclipsed by Blackstone’s acquisition of Equity Office Properties Trust and again by the 2007 takeover of Energy Future Holdings Corp., by KKR and TPG Inc., for $43 billion including debt.
HCA, the largest U.S. hospital operator, had about $25.7 billion of debt as of Dec. 31, about 4.8 times its earnings before interest, taxes, depreciation and amortization, even before HCA’s owners tapped credit lines in January to pay themselves a $1.75 billion dividend. Tenet Healthcare Corp.’s ratio was 4.4 and LifePoint Hospitals Inc.’s was 2.85 at year- end, according to data compiled by Bloomberg.
Health Fares Better
Health-care companies have fared better than the average private-equity investment during the economic decline. KKR said in February that its holding in the company had gained as much as 90 percent in value as of Dec. 31, while stakes in Energy Future Holdings Corp. and First Data Corp. were worth less than their initial cost.
HCA was founded in 1968, when Nashville physician Thomas Frist Sr., and his son, Thomas Frist Jr., and Jack Massey built a hospital there and formed Hospital Corp. of America. By 1987, the company had grown to operate 463 hospitals, according to the company’s Web site. Thomas Frist Sr. is also the father of Bill Frist, a physician and the former Senate majority leader.
HCA went private in a $5.1 billion leveraged buyout in 1989, and then went public again in 1992, according to the company Web site. In 1994, HCA merged with Louisville, Kentucky- based Columbia Hospital Corp. In the mid-1990s the company, then called Columbia/HCA Healthcare Corp., operated 350 hospitals, 145 outpatient clinics and 550 home-care agencies, according to the company.
What the implied valuation?
It's an inital S-1, do you know how many S-1's have been filed by PE firms in the last 3 quarters?
Wait until they actually float the issue or price it to see it "IPO"... they're testing the market's appetite for it now...
I wouldn't be surprised if it come in the ballpark of $40bn to $47bn range (7.2x-8.5x EBITDA)
How does that work? Is the ~$4B or so referring to something else?
wow every bb is on this deal except ubs, fucking loser bank douche ubs
BofA Merrill Lynch, Citi and J.P. Morgan are serving as joint book-running managers of the offering and representatives of the underwriters. Barclays Capital, Credit Suisse, Deutsche Bank Securities, Goldman, Sachs & Co., Morgan Stanley and Wells Fargo Securities are also acting as joint book-running managers of the offering.
http://www.reuters.com/article/idUSTRE6463LV20100507
glad i left there
wtf is ur problem?
speaking of which do ppl know why big deals require more banks ?
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