Emdeon IPO: Healthcare Reform Beneficiary (EM)

Emdeon Inc. (NYSE: EM) is today’s ‘other’ initial public offering.  The company priced 23,700,000 shares of its common stock at a price of $15.50 per share. Not all proceeds are going back into the company: 10,725,000 shares were offered by Emdeon itself and 12,975,000 were offered by selling stockholders.  This is essentially nothing short of a health care reform play which saw a boost in shares and a top-end of the range pricing.

Emdeon is a leading provider of revenue and payment cycle solutions that connect payers, providers and patients to integrate and automate key business and administrative functions throughout the patient encounter. The company’s business consists of 340,000 providers, 1,200 government and commercial payers, some 5,000 hospitals, about 81,000 dentists, another 55,000 pharmacies, and a network of roughly 600 vendor partners.

Emdeon has been active in making strategic deals.  Just recently, the company acquired The Sentinel Group, a health care fraud and abuse management services, in June.  It also recently announced the acquisition of eRx Network, LLC.  One recent pre-IPO announcement was that the company would collaborate with RX Response in critical pharmacy disaster reporting.

If Emdeon sounds familiar, that is because General Atlantic Partners bought it back in 2006 and it also received an investment from Hellman & Friedman. It also has ties to James Clark, the Netscape founder and was part of Healtheon. Morgan Stanley, Goldman Sachs, UBS, and Barclays Capital are listed as the book-running managers of the offering.

JON C. OGG
AUGUST 12, 2009