Cotiviti Gears Up for Secondary Offering

By Chris Lange Updated Jan 12, 5:21PM EST · Published Nov 29, 10:05AM EST

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Cotiviti Gears Up for Secondary Offering — © Thinkstock

Cotiviti Holdings Inc. (NYSE: COTV) filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) for a secondary offering. The company intends to offer 10 million shares with an overallotment option for an additional 1.5 million shares. At the most recent closing price (Monday $31.45), the entire offering is valued up to $361.68 million.

The underwriters for the offering are Goldman Sachs, JPMorgan, Barclays Citigroup, Credit Suisse, Morgan Stanley, SunTrust Robinson Humphrey, Baird, William Blair and Leerink Partners.

This is a leading provider of analytics-driven payment accuracy solutions, focused primarily on the health care sector. Its integrated solutions help clients enhance payment accuracy in an increasingly complex health care environment. Cotiviti leverages its robust technology platform, configurable analytics, proprietary information assets and expertise in health care reimbursement to help clients enhance their claims payment accuracy.

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Cotiviti helps its health care clients identify and correct payment inaccuracies, which resulted in over $2.7 billion in savings in 2015. The company works with over 40 health care organizations, including eight of the 10 largest U.S. commercial, Medicare and Medicaid managed health plans, as well as the Centers for Medicare & Medicaid Services. This is also a leading provider of payment accuracy solutions to over 35 retail clients, including eight of the 10 largest retailers in the United States.

The company described its finances in the filing as follows:

For the nine months ended September 30, 2016 and the year ended December 31, 2015, our total revenue was $457.3 million and $541.3 million, respectively. In these same periods, we generated Adjusted EBITDA of $175.3 million and $203.4 million, respectively, representing 38.3% and 37.6% of revenue, respectively, and net income of $23.6 million and $13.9 million, representing 5.2% and 2.6% of revenue, respectively.

The company will not receive any proceeds from this offering. Instead, the selling shareholders will receive all proceeds.

Shares of Cotiviti were trading at $30.78 on Tuesday, with a consensus analyst price target of $37.11 and post-IPO trading range of $17.00 to $36.44.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.