Cinven’s Spire Gains on Debut After Pricing IPO at Bottom

Jul 18, 2014 12:55 pm ET

(Updates with trading from first paragraph.)

July 18 (Bloomberg) -- Spire Healthcare Group Plc, the U.K. hospital operator controlled by private-equity firm Cinven Ltd., rose on its debut after pricing stock in its 315.2 million-pound ($539 million) initial public offering at the bottom of the range.

Spire sold shares at 210 pence each, the company said in a statement today. The IPO price valued the London-based company at 842.3 million pounds. The shares were offered for as much as 300 pence apiece.

The hospital operator sold 150 million new shares, while some company directors sold about 100,000. Cinven, which acquired Spire for 2.1 billion euros ($2.8 billion) in 2007, will hold about 62 percent of the voting rights, assuming the over-allotment option isn’t exercised. The firm didn’t sell shares in the offering, though it will in the event that the over-allotment option is exercised, according to the statement.

Spire rose as much as 1.9 percent and traded 0.2 percent higher to 210.50 pence at its close in London. The benchmark Stoxx Europe 600 Index lost less than 0.1 percent, and most European stocks fell today amid concern that the conflict between Ukraine and Russia is deepening.

Private-equity owners have helped fuel the largest amounts raised from IPOs in Europe this year since 2006 as they seek to exit stakes acquired before the global credit crunch.

IPO Surge

The surge in deals has resulted in more companies in the region pricing their offerings lower than initially planned, and at least 11 IPO hopefuls pulled their sales this year amid lack of investor interest, according to data compiled by Bloomberg.

Spire, which owns 39 private hospitals and 13 clinics in the U.K., says it’s the country’s top private provider of knee and hip operations. It’s seeking to ride an economy heading for the strongest growth of any Group of Seven nation this year, with unemployment at a five-year low and house prices soaring.

The company’s private medical insurance business, whose performance is tied to the economy, brings in more than 50 percent of revenue. Sales at the division were little changed last year at about 416 million pounds, according to a June 25 statement.

Bank of America Corp., JPMorgan Chase & Co. and Morgan Stanley managed Spire’s share sale.