When Accretive Health launches its IPO, the software and services provider that aims to help the health care industry manage its revenue cycle hopes to raise anywhere between $187 million and $213 million, according to the company's filing Tuesday with the Securities and Exchange Commission.
In the following weeks and months, Accretive's investment bankers will be out trying to entice institutional investors to place their orders for shares, which will help them determine the final IPO price and size of the offering. Accretive set an initial pricing range for its IPO at $14 to $16 a share for 13.3 million shares. If demand is hot, watch for Accretive to raise its price range leading up to its IPO -- and if investors are cold, watch for the reverse.
Competitor MedAssets (MDAS), for example, set its IPO price range at $14 to $16 a share for its 13.3 million shares in 2007 and was able to attract enough interest to debut at the high end of its range. The company priced its IPO at $16 a share and on its first day of trading in December 2007 soared 28% to close at $20.50 a share. The stock currently trades around $23 a share.
Eclipsys (ECLP), another Accretive competitor, did not fare as well with its IPO during the market's go-go years. Although the company initially set a price range of $16 to $18 a share for its offering of 4.7 million shares, it ultimately priced its IPO below that at $15 a share and pulled back its offering size to 4.2 million shares. When Eclipsys' IPO debuted in the summer of 1998, its stock rose 12.5% to close at $16.88 a share. Today, the stock trades around $21 a share.
As Accretive seeks to launch its IPO, the timing is good. Investors eager to jump into newly issued stocks have had to wait on the sidelines during the financial meltdown and slow recovery. But with markets steadily gaining ground since March of last year, the IPO market is gaining traction again.
Add to that health care reform, which will pump more patients into the system. Accretive's technology and services aims to aid health care providers process patient claims, and with health care reform that need may become even greater.
Accretive Health Seeks Up to $213 Million IPO