Integrated Health Services Inc., a privately held operator of nursing homes and long-term care centers, plans to sell 43 percent of the company to the public in an initial stock offering that could raise more than $48 million, according to a filing yesterday with the Securities and Exchange Commission.
The Hunt Valley-based company said in the filing that 3 million shares would be sold for a maximum price of $14 a share and that an additional 450,000 shares would be issued if demand was strong.
After the sale of stock, IHS would have nearly 7 million common shares outstanding. The majority of that stock would remain in the hands of private investors, primarily Baltimore-based venture capital firm New Enterprise Associates, ABS Ventures, which is a unit of Alex. Brown Inc., and Hancock Venture Partners, an affiliate of John Hancock Mutual Life Insurance Co.
IHS, a rapidly growing, 4-year-old company, operates 42 medical centers in 11 states. Since its creation, the company has concentrated on providing medical and long-term care to Medicare recipients and residents able to pay through personal funds.
Starting with roughly $100,000 in 1986, the company raised $7.5 million during its first 15 months and has raised more than $20 million over the past few years through the issuance of preferred stock and subordinated debt.
Through acquisitions and management contracts, the company has increased its revenue by more than 10-fold during the last four years, recording $82 million in revenue for the fiscal year that ended June 30.
According to the SEC filing, IHS would use the proceeds from its planned sale of stock to pay $26.5 million of its $64.3 million in long-term debt. The remaining funds were slated for corporate expenses including the addition of specialty units at its geriatric facilities, the filing said.
The company has applied to list the newly issued stock on the NASDAQ system under the symbol "IHSI."