GE HealthCare Technologies Inc. Prices Upsized Secondary Offering of 15,000,000 Shares

Rhea-AI Summary

GE HealthCare Technologies Inc. (Nasdaq: GEHC) has priced its upsized secondary public offering of 15,000,000 shares of common stock at $86.00 per share. The offering was increased from the initially announced 10,000,000 shares. GE HealthCare will not receive any proceeds from the sale. Prior to closing, GE Aerospace is expected to exchange the shares for debt held by Morgan Stanley affiliates. The selling stockholder has granted underwriters an option to purchase an additional 2,250,000 shares. Morgan Stanley and Citigroup are leading the offering, which is expected to close on September 16, 2024, subject to customary conditions.

Positive

• Upsized offering from 10,000,000 to 15,000,000 shares indicates strong demand
• Offering price of $86.00 per share suggests investor confidence
• Debt-for-equity exchange may improve GE Aerospace's balance sheet

Negative

• Potential dilution for existing shareholders due to increased share count
• No proceeds from the offering will be received by GE HealthCare

Financial Analyst

The upsized secondary offering of 15 million shares at $86.00 per share is a significant move for GE HealthCare. This offering, increased from the initial 10 million shares, could potentially raise $1.29 billion. The debt-for-equity exchange with Morgan Stanley affiliates is a strategic financial maneuver, allowing GE Aerospace to reduce its debt burden without directly impacting GE HealthCare's balance sheet. The additional 2.25 million share option granted to underwriters provides further flexibility. This transaction showcases strong market demand for GEHC shares, potentially indicating investor confidence in the company's prospects. However, the increased float might lead to short-term price pressure. Long-term implications depend on how effectively GE Aerospace utilizes this debt reduction to strengthen its financial position.

Market Research Analyst

This offering represents a significant shift in GE HealthCare's ownership structure. The upsized offering suggests robust investor interest, potentially driven by the healthcare sector's resilience and growth prospects. The $86.00 per share price implies a market valuation of approximately $39 billion for GE HealthCare. This transaction could increase GEHC's liquidity and trading volume, potentially making it more attractive to institutional investors. However, retail investors should be aware that the increased float might lead to short-term stock price volatility. The involvement of major underwriters like Morgan Stanley and Citigroup adds credibility to the offering. Investors should monitor how this change in ownership structure impacts GE HealthCare's strategic decisions and market performance going forward.

Legal Expert

The secondary offering's structure, involving a debt-for-equity exchange followed by a public sale, is a complex but legally sound approach. It allows GE Aerospace to reduce debt without triggering direct tax consequences for GE HealthCare. The use of an automatically effective shelf registration on Form S-3 streamlines the offering process, indicating GE HealthCare's status as a well-known seasoned issuer. The explicit statement that this press release does not constitute an offer to sell is a standard legal disclaimer to comply with securities laws. Investors should note the option granted to underwriters for additional shares, exercisable until September 30, 2024, which could impact future share supply. Overall, this transaction appears to be structured to maximize financial benefits while ensuring regulatory compliance.

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 15,000,000 shares of its common stock (the “GEHC Shares”) at a public offering price of $86.00 per share. The Offering was upsized from the previously announced offering size of 10,000,000 GEHC Shares. 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, GE Aerospace (General Electric Company) is expected to exchange the GEHC Shares for indebtedness of GE Aerospace held by Morgan Stanley Bank, N.A. and Morgan Stanley Senior Funding, Inc. (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 2,250,000 additional shares of GE HealthCare common stock for settlement on or before September 30, 2024.

Morgan Stanley and Citigroup are acting as the lead joint book-running managers for the Offering. The Offering is expected to close on September 16, 2024, subject to customary closing conditions.

The Offering is being made pursuant to an automatically effective 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. 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; and Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 (Tel: 800-831-9146).

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 Technologies Inc.

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 125 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 approximately 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/20240912168889/en/

Investor Relations:

Carolynne Borders

+1-631-662-4317

carolynne.borders@gehealthcare.com

Media:

Jennifer Fox

+1-414-530-3027

jennifer.r.fox@gehealthcare.com

Source: GE HealthCare Technologies Inc.

FAQ

What is the price per share for GE HealthCare's (GEHC) secondary offering?

GE HealthCare Technologies Inc. (GEHC) has priced its secondary offering at $86.00 per share.

How many shares are being offered in GE HealthCare's (GEHC) secondary offering?

The secondary offering includes 15,000,000 shares of GE HealthCare (GEHC) common stock, upsized from the initially announced 10,000,000 shares.

When is the expected closing date for GE HealthCare's (GEHC) secondary offering?

The secondary offering for GE HealthCare (GEHC) is expected to close on September 16, 2024, subject to customary closing conditions.

Who are the lead underwriters for GE HealthCare's (GEHC) secondary offering?

Morgan Stanley and Citigroup are acting as the lead joint book-running managers for GE HealthCare's (GEHC) secondary offering.