PACS Group, Inc. Announces Closing of Its Upsized Public Offering and Full Exercise of the Underwriters’ Option to Purchase Additional Shares from the Selling Stockholders

Rhea-AI Summary

PACS Group, Inc. (NYSE: PACS) has successfully closed its upsized public offering, selling a total of 19,034,482 shares of common stock at $36.25 per share. The offering included 2,777,778 shares sold by the company and 16,256,704 shares sold by selling stockholders. The underwriters fully exercised their option to purchase an additional 2,482,758 shares from the selling stockholders. The gross proceeds amounted to approximately $101 million for PACS and $589 million for the selling stockholders. Citigroup, J.P. Morgan, and Truist Securities led the offering as book-running managers, with several other firms participating. The offering was made through a prospectus filed with the SEC.

Positive

• Successful closing of upsized public offering
• Gross proceeds of approximately $101 million for the company
• Full exercise of underwriters' option to purchase additional shares
• Strong participation from multiple leading financial institutions as book-running managers

Negative

• Potential dilution of existing shareholders due to new share issuance
• Company did not receive proceeds from the sale of shares by selling stockholders

Financial Analyst

PACS Group's upsized public offering marks a significant capital raise, with total gross proceeds of approximately $690 million. The company's direct benefit is to $101 million, as the majority of shares were sold by existing stockholders. This suggests a potential shift in ownership structure and could indicate insiders cashing out. The pricing at $36.25 per share and full exercise of the underwriters' option demonstrate strong market demand. However, the substantial insider selling might raise questions about long-term growth prospects. Investors should closely monitor how PACS utilizes its $101 million proceeds and watch for any changes in insider ownership patterns post-offering.

Market Research Analyst

The successful completion of PACS Group's upsized offering, including the full exercise of the underwriters' option, signals robust investor interest in the company. The involvement of major underwriters like Citigroup, J.P. Morgan and Truist Securities lends credibility to the offering. The significant participation of selling stockholders, accounting for 85.4% of the total shares sold, could be interpreted as a vote of confidence in the current valuation or as a desire to diversify holdings. For retail investors, this large-scale offering might increase liquidity in PACS stock, potentially leading to reduced volatility. However, the substantial insider selling could also be seen as a cautionary signal, warranting careful analysis of the company's future growth prospects and market position.

FARMINGTON, Utah--(BUSINESS WIRE)-- PACS Group, Inc. (NYSE: PACS) (“PACS” or the “Company”) today announced the closing of its upsized underwritten public offering of 19,034,482 shares of its common stock, which includes (i) 2,777,778 shares of its common stock sold by the Company and (ii) 16,256,704 shares of common stock sold by certain selling stockholders, which includes the exercise in full by the underwriters of their 30-day option to purchase an additional 2,482,758 shares of common stock from the selling stockholders, at a public offering price of $36.25 per share, for total gross proceeds of approximately $101 million to the Company and approximately $589 million to the selling stockholders, before deducting underwriting discounts and commissions and offering expenses. PACS did not receive any proceeds from any sale of shares by the selling stockholders.

Citigroup, J.P. Morgan and Truist Securities acted as lead book-running managers for the offering. RBC Capital Markets, Goldman Sachs & Co. LLC and UBS Investment Bank acted as joint book-running managers. Stephens Inc. and Oppenheimer & Co. acted as co-managers.

A registration statement on Form S-1 relating to the securities being sold in this offering (including the accompanying prospectus) has been filed with and was declared effective by the U.S. Securities and Exchange Commission (the “SEC”), and is available on the SEC’s website located at www.sec.gov. This offering was made only by means of a prospectus. Copies of the final prospectus relating to the offering may be obtained from: Citigroup Global Markets Inc. at 388 Greenwich Street, New York, New York 10013, Attention: General Counsel, facsimile number: +1 (646) 291-1469; J.P. Morgan Securities LLC at 383 Madison Avenue, New York, New York 10179, Attention: Equity Syndicate Desk, facsimile number: +1 (212) 622-8358; and Truist Securities, Inc. at 3333 Peachtree Road NE, 11th Floor, Atlanta, GA 30326, Attention: Equity Capital Markets, facsimile number: (404) 816-8535.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other 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 PACS Group, Inc.

PACS is a holding company investing in post-acute healthcare facilities, professionals, and ancillary services. Founded in 2013, PACS is one of the largest post-acute platforms in the United States. Its independent subsidiaries operate 276 post-acute care facilities across 15 states serving up to 29,000 patients daily.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240909867156/en/

Brooks Stevenson, VP Corporate Communications

(801) 597-9538 | Brooks.Stevenson@pacs.com

Source: PACS Group, Inc.

FAQ

How many shares did PACS Group (PACS) sell in its public offering?

PACS Group (PACS) sold 2,777,778 shares of its common stock in the public offering.

What was the price per share in PACS Group's (PACS) public offering?

The public offering price was $36.25 per share of PACS Group (PACS) common stock.

How much did PACS Group (PACS) raise in gross proceeds from the offering?

PACS Group (PACS) raised approximately $101 million in gross proceeds from the offering.

Did the underwriters exercise their option to purchase additional shares of PACS Group (PACS)?

Yes, the underwriters fully exercised their 30-day option to purchase an additional 2,482,758 shares from the selling stockholders.