PACS Group, Inc. Announces Pricing of Its Upsized Public Offering

Rhea-AI Summary

PACS Group, Inc. (NYSE: PACS) has announced the pricing of its upsized public offering of 16,551,724 shares of common stock at $36.25 per share. The offering includes 2,777,778 shares sold by the company and 13,773,946 shares sold by selling stockholders. The gross proceeds are approximately $101 million for PACS and $499 million for the selling stockholders. Additionally, selling stockholders granted underwriters a 30-day option to purchase up to 2,482,758 additional shares. The offering is expected to close on September 9, 2024. Lead book-running managers include Citigroup, J.P. Morgan, and Truist Securities, with other firms acting as joint book-running managers and co-managers.

Positive

• Upsized public offering raising approximately $101 million for PACS
• Strong demand for shares, with offering price set at $36.25 per share
• Participation of major financial institutions as underwriters, potentially indicating market confidence

Negative

• Significant portion of shares (13,773,946) sold by existing stockholders, not benefiting the company directly
• Potential dilution for existing shareholders due to the issuance of new shares
• PACS will not receive proceeds from the sale of shares by selling stockholders or from the additional 30-day option

Financial Analyst

PACS Group's upsized public offering signals strong investor interest, with the company raising $101 million in gross proceeds. This capital injection could bolster PACS's financial position and fuel growth initiatives. However, the significant portion of shares sold by existing stockholders ($499 million) might raise questions about insider confidence. The pricing at $36.25 per share provides a clear market valuation benchmark. The involvement of major underwriters like Citigroup and J.P. Morgan lends credibility to the offering. Investors should monitor how PACS utilizes the new capital and whether it translates into improved financial performance and shareholder value in the coming quarters.

Market Research Analyst

This offering's upsizing and the inclusion of major underwriters suggest strong market demand for PACS stock. The total offering size of approximately $600 million indicates significant investor appetite in the current market environment. The 30% overallotment option further supports this view. However, the substantial selling by existing stockholders could be interpreted as a lack of long-term confidence or simply portfolio rebalancing. The pricing at $36.25 sets a new reference point for PACS's market valuation. Investors should watch for post-offering stock price movements and trading volumes to gauge broader market sentiment and the stock's liquidity profile going forward.

Legal Expert

The public offering's compliance with SEC regulations, including the filed and effective Form S-1, demonstrates PACS's adherence to legal requirements. The clear disclosure of offering terms and underwriter details aligns with transparency standards. The statement regarding the offering being made only by prospectus and the availability of final prospectus copies are important legal safeguards for investors. The disclaimer about not constituting an offer to sell in unauthorized jurisdictions is a standard legal protection. Investors should note that while these legal procedures are in place, they do not guarantee the offering's success or future stock performance. It's advisable to review the full prospectus for comprehensive risk disclosures and company information.

FARMINGTON, Utah--(BUSINESS WIRE)-- PACS Group, Inc. (NYSE: PACS) (“PACS” or the “Company”) today announced the pricing of its upsized underwritten public offering of 16,551,724 shares of its common stock, which includes 2,777,778 shares of common stock sold by the Company and 13,773,946 shares of common stock sold by certain 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 $499 million to the selling stockholders, before deducting underwriting discounts and commissions and offering expenses. In addition, the selling stockholders have granted the underwriters a 30-day option to purchase up to an additional 2,482,758 shares of the Company’s common stock at the public offering price, less underwriting discounts and commissions. PACS will not receive any proceeds from any sale of shares by the selling stockholders. The offering is expected to close on September 9, 2024, subject to customary closing conditions.

Citigroup, J.P. Morgan and Truist Securities are acting as lead book-running managers for the offering. RBC Capital Markets, Goldman Sachs & Co. LLC and UBS Investment Bank are acting as joint book-running managers. Stephens Inc. and Oppenheimer & Co. are acting 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 is being made only by means of a prospectus. Copies of the final prospectus relating to the offering may be obtained, when available, 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/20240906413286/en/

Brooks Stevenson, VP Corporate Communications

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

Source: PACS Group, Inc.

FAQ

How many shares are being offered in PACS Group's (NYSE: PACS) public offering?

PACS Group is offering a total of 16,551,724 shares of common stock, with 2,777,778 shares sold by the company and 13,773,946 shares sold by selling stockholders.

What is the price per share for PACS Group's (NYSE: PACS) public offering?

The public offering price for PACS Group's shares is $36.25 per share.

How much will PACS Group (NYSE: PACS) raise from its public offering?

PACS Group will raise approximately $101 million in gross proceeds from the public offering.

When is the expected closing date for PACS Group's (NYSE: PACS) public offering?

The public offering is expected to close on September 9, 2024, subject to customary closing conditions.