GE HealthCare Technologies Inc. Prices Secondary Offering of 13,000,000 Shares

Rhea-AI Summary

GE HealthCare Technologies Inc. (GEHC) announced the pricing of a secondary underwritten public offering of 13,000,000 shares of its common stock at $82.25 per share. General Electric Company (GE) is expected to exchange the GEHC shares for indebtedness held by Morgan Stanley. The offering, led by top financial institutions, is expected to close on February 21, 2024.

Insights

Financial Analyst

The secondary underwritten public offering of 13,000,000 shares by GE HealthCare Technologies at $82.25 per share represents a significant liquidity event for the selling stockholder, Morgan Stanley & Co. LLC, by virtue of the debt-for-equity exchange. This transaction indicates an active approach to capital management and balance sheet optimization by General Electric Company (GE), using the equity of its subsidiary, GE HealthCare, to manage its own indebtedness.

From a financial perspective, the transaction's structure, with no proceeds going to GE HealthCare, suggests that GE's primary goal is to reduce leverage rather than to fund GE HealthCare's operations or growth initiatives. The underwriting discount and the option for underwriters to purchase additional shares could potentially dilute existing shareholders but also reflects confidence among institutional investors in GE HealthCare's market valuation and liquidity profile.

For investors, the pricing of the offering provides a benchmark for GE HealthCare's valuation in the market. The involvement of major banks as joint book-running managers could be indicative of strong institutional interest and a robust market for the shares. It is also important to note that the offering is subject to customary closing conditions, which adds an element of risk until the transaction is finalized.

Market Research Analyst

The involvement of a diverse group of leading financial institutions in the offering underscores the strategic importance of GE HealthCare within the healthcare technology market. The sector is characterized by high capital intensity and rapid innovation and GE HealthCare's positioning could be further solidified by this transaction through the signaling effect to the market.

Market conditions at the time of the offering, investor sentiment towards the healthcare sector and GE HealthCare's competitive positioning will all influence the success of the offering. A successful offering at the stated price could be interpreted as a positive market sentiment towards GE HealthCare's growth prospects and financial health.

Additionally, the offering's timing and price could reflect broader market trends, including interest rates, which impact the cost of capital and investor appetite for equity investments. Investors will likely monitor the closing of the transaction and any subsequent share price performance as indicators of market perception and the success of GE's strategic financial maneuvers.

Legal Expert

The offering is being conducted under a shelf registration statement, which provides GE HealthCare with the flexibility to sell securities over a prolonged period. The legal implications of such a transaction are significant, as it requires adherence to SEC regulations and thorough disclosure in the form of a prospectus supplement.

Legal scrutiny ensures that all the material information is made available to potential investors, allowing them to make informed decisions. The stipulation that the sale of securities will not occur in jurisdictions where it would be unlawful prior to registration or qualification under the securities laws highlights the legal complexities inherent in such cross-jurisdictional offerings.

For stakeholders, the legal framework governing the offering provides a level of assurance that the transaction is being conducted in compliance with securities laws. However, they must also be aware of the inherent legal risks, including the potential for market fluctuations between the announcement and the closing date that could impact the final terms of the offering.

CHICAGO--(BUSINESS WIRE)-- GE HealthCare Technologies Inc. (Nasdaq: GEHC) (the “Company” or “GE HealthCare”) announced today the pricing of the previously announced secondary underwritten public offering (the “Offering”) of 13,000,000 shares of its common stock (the “GEHC Shares”) at a public offering price of $82.25 per share ($80.605 per share, net of underwriting discount). GE HealthCare is not selling any shares of common stock and will not receive any proceeds from the sale of the GEHC Shares in the Offering or from the debt-for-equity exchange (as described below).

Prior to the closing of the Offering, General Electric Company (“GE”) is expected to exchange the GEHC Shares for indebtedness of GE held by Morgan Stanley Senior Funding, Inc. and Morgan Stanley Bank, N.A. (together, the “MS Lenders”), affiliates of Morgan Stanley & Co. LLC, the selling stockholder in the Offering by designation of the MS Lenders. Following the debt-for-equity exchange, if consummated, Morgan Stanley & Co. LLC, as the selling stockholder in the Offering, intends to sell the GEHC Shares to the underwriters in the Offering. The selling stockholder in the Offering has granted the underwriters an option to purchase additional shares of GE HealthCare common stock at the public offering price less the underwriting discount for 30 days.

Morgan Stanley, BofA Securities, Citigroup, Evercore ISI, Goldman Sachs & Co. LLC and J.P. Morgan are serving as the lead joint book-running managers for the Offering. BNP PARIBAS, Credit Agricole CIB, HSBC, SMBC Nikko and SOCIETE GENERALE are also serving as joint book-running managers for the Offering. The Offering is expected to close on February 21, 2024, subject to customary closing conditions.

The Offering is being made pursuant to a shelf registration statement (including a prospectus) on Form S-3 with the U.S. Securities and Exchange Commission (the “SEC”) for the Offering to which this communication relates, which registration statement became effective upon filing. A final prospectus supplement and accompanying prospectus describing the terms of the Offering will be filed with the SEC. You may obtain these documents for free by visiting EDGAR on the SEC’s website at www.sec.gov. Alternatively, copies of the final prospectus supplement and accompanying prospectus relating to the Offering may be obtained, when available, from Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014; BofA Securities, NC1-022-02-25, 201 North Tryon Street, Charlotte, NC 28255-0001, Attn: Prospectus Department, email: dg.prospectus_requests@bofa.com; Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 (Tel: 800-831-9146); Evercore Group L.L.C., Attention: Equity Capital Markets, 55 East 52nd Street, 35th Floor, New York, NY 10055, by telephone at (888) 474-0200 or by e-mail at ecm.prospectus@evercore.com; Goldman Sachs & Co. LLC, Attn: Prospectus Department, 200 West Street, New York, New York 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316, or by emailing prospectus-ny@ny.email.gs.com; and J.P. Morgan Securities LLC, Attention: c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at (866) 803-9204 or by e-mail at prospectus-eq_fi@jpmchase.com.

This press release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About GE HealthCare

GE HealthCare is a leading global medical technology, pharmaceutical diagnostics, and digital solutions innovator, dedicated to providing integrated solutions, services, and data analytics to make hospitals more efficient, clinicians more effective, therapies more precise, and patients healthier and happier. Serving patients and providers for more than 100 years, GE HealthCare is advancing personalized, connected, and compassionate care, while simplifying the patient’s journey across the care pathway. Together our Imaging, Ultrasound, Patient Care Solutions, and Pharmaceutical Diagnostics businesses help improve patient care from diagnosis, to therapy, to monitoring. We are a $19.6 billion business with 51,000 colleagues working to create a world where healthcare has no limits.

Forward‐Looking Statements

This release contains forward-looking statements. These forward-looking statements might be identified by words, and variations of words, such as “will,” “expect,” “may,” “would,” “could,” “plan,” and similar expressions. These forward-looking statements may include, but are not limited to, statements about the size, timing or results of the Offering and the selling stockholders’ intent to offer shares of common stock, and reflect management’s current plans, estimates and expectations and are inherently uncertain. The inclusion of any forward-looking information in this release should not be regarded as a representation that the future plans, estimates or expectations contemplated will be achieved. These forward-looking statements involve risks and uncertainties, many of which are beyond the Company’s control. Factors that could cause actual results to differ materially from those described in the Company’s forward-looking statements include, but are not limited to, operating in highly competitive markets; our ability to control increases in healthcare costs and any subsequent effect on demand for the Company’s products, services, or solutions; the Company’s ability to operate effectively as an independent, publicly-traded company; and the other factors detailed in the Company’s Registration Statement on Form S-3 filed on February 15, 2024, as well as other risks discussed in the Company’s filings with the U.S. Securities and Exchange Commission. Please also see the “Risk Factors” section of the Company’s Form 10-K filed with the U.S. Securities and Exchange Commission and any updates or amendments it makes in future filings. There may be other factors not presently known to the Company or which it currently considers to be immaterial that could cause the Company’s actual results to differ materially from those projected in any forward-looking statements the Company makes. The Company does not undertake any obligation to update or revise its forward-looking statements except as required by applicable law or regulation.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240215322001/en/

Investor Relations Contact:

Carolynne Borders

+1-631-662-4317

carolynne.borders@gehealthcare.com

Media Contact:

Tor Constantino

+1-585-441-1658

tor.constantino@gehealthcare.com

Source: GE HealthCare Technologies Inc.

FAQ

What is the pricing of the secondary underwritten public offering by GE HealthCare Technologies Inc.?

The pricing of the offering is $82.25 per share.

How many shares of common stock are involved in the Offering by GEHC?

The Offering consists of 13,000,000 shares of common stock.

Who is expected to exchange the GEHC shares for indebtedness in the Offering?

General Electric Company (GE) is expected to exchange the GEHC shares for indebtedness held by Morgan Stanley.

When is the Offering by GEHC expected to close?

The Offering is expected to close on February 21, 2024.

Who are the lead joint book-running managers for the Offering by GEHC?

The lead joint book-running managers for the Offering are Morgan Stanley, BofA Securities, Citigroup, Evercore ISI, Goldman Sachs & Co. LLC, and J.P. Morgan.