Blackstone-Backed Vanguard Health Systems Files for $600 Million IPO

Includes: BX, HCA
by: Renaissance Capital IPO Research

Vanguard Health Systems, Inc., which operates 26 acute care and specialty hospitals in five US states, filed on Friday with the SEC to raise up to $600 million in an initial public offering. The Nashville, TN-based company was founded in 1997 and booked $3.6 billion in sales and $337 million in adjusted EBITDA for the 12 months ended December 31, 2010. Vanguard is majority-owned by private equity firm Blackstone Group (NYSE:BX), which acquired the hospital operator in 2004. Morgan Stanley Capital Partners owns a minority stake in the company. Vanguard Health plans to list on the NYSE under the symbol VHS. Underwriters, pricing terms and timing were not specified for the deal.

Vanguard Health Systems' IPO filing came just over a month after the successful debut of major hospital operator HCA Holdings (NYSE:HCA), which raised $3.8 billion on March 9th in what was the largest private equity backed US IPO on record. HCA was taken private in 2006 by Merrill Lynch, Bain Capital, KKR and management for $33 billion, at the time the largest LBO in history. With 158 hospitals and over $30 billion in annual revenue, HCA is more than 8x the size of Vanguard Health (in terms of revenue). HCA priced its IPO at $30 a share and closed Friday at $31.98 (up 6.6%).