Oak Street Health, the US-based primary care centre operator that counts health system Humana as an investor, will go public today in a $328m initial public offering.
The IPO consists of more than 15.6 million shares issued on the New York Stock Exchange and priced at $21.00 each, above the $19 to $20 range the company set on Monday, valuing it at about $5bn. That range had been lifted from $15 to $17 per share.
Oak Street runs a network of more than 50 centres that provide primary care to patients on US state insurance scheme Medicare, using analytics technology to generate information that can help improve quality of care.
The company increased revenue from about $318m to $557m in 2019 but its net loss also expanded, from $79.5m to $108m, in the process. It plans to put more than $86m of the IPO proceeds into repaying debt, including an agreement for which $80m is still owed.
Humana invested $50m in Oak Street in September 2018 and its 5.7% share of the company was diluted to 5.3% in the offering. Growth equity firm General Atlantic emerged with a 32% stake while investment firm Newlight Partners has a 20.9% share post-IPO.
Joint book running managers JP Morgan, Goldman Sachs, Morgan Stanley, William Blair and Piper Sandler and co-managers Baird and Truist Securities have an option lasting 30 days allowing them to buy more than 2.3 million additional shares, potentially boosting the offering to more than $377m.
