June 6, 2011 / 12:43 PM / in 6 years

Vanguard Health to raise up to $575 million from IPO

2 Min Read

(Reuters) - Vanguard Health Systems, controlled by private equity fund Blackstone Group (BX.N), said it expects to raise up to $575 million from an initial public offering, valuing the hospital operator at about $1.57 billion.

Vanguard Health expects to price its IPO in the range of $21-$23 a share, and will use net proceeds of $511.6 million partly to repay debt, according to documents filed with the U.S. Securities and Exchange Commission on Monday.

Blackstone Group owns a 66 percent stake in the company, which was founded in 1997 and operates around 26 hospitals in Arizona, Illinois, Michigan, Texas and Massachusetts.

Following the offering, Blackstone's stake will be cut to 41.4 percent, while Morgan Stanley Capital Partners, which currently has a 17.3 percent stake, will own 10.8 percent of the company.

Vanguard Health had posted a net loss applicable to shareholders of $49.2 million for fiscal 2010.

In March, Tennessee-based hospital operator HCA Holding Inc (HCA.N) sold 126.2 million shares for $30.00 each, raising $3.79 billion, in the biggest private equity-backed IPO ever in the United States.

Bank of America Merrill Lynch and Citigroup are among the underwriters of the offering. Vanguard shares are expected to trade on the New York Stock Exchange under the symbol "VHS". (Reporting by Tanya Agrawal in Bangalore; Editing by Don Sebastian and Saumyadeb Chakrabarty)

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