Wednesday, December 16, 2009

Team Health IPO Prices Below Expectations

Team Health's IPO priced at $12 per share vs. an expected $14 to $16. Team Health is a provider of hospital based physicians, including emergency room doctors, radiologists, and hospitalists.

The IPO provided $146.5 million. Proceeds will primarily be used to reduce debt. Team Health is owned by The Blackstone Group, a private equity underwriter (PEU). PEU's levered debt for acquisitions, especially during the go-go years of 2005-2008. Bloomberg reported Team Health has $612 million in debt. It acquired the company in November 2005 for roughly $1 billion.

This is the second IPO this week to price well below the expected range. Carlyle Group's Cobalt International Energy did likewise. Wall Street is getting finicky.