PACS Group, Inc. Announces Proposed Offering of Its Common Stock

Rhea-AI Summary

PACS Group, Inc. (NYSE: PACS) has announced an underwritten public offering of 13,888,890 shares of its common stock. The offering includes 2,777,778 shares sold by the company and 11,111,112 shares sold by certain selling stockholders. The selling stockholders may grant underwriters a 30-day option to purchase up to an additional 2,083,332 shares. PACS will not receive proceeds from the sale of shares by selling stockholders.

The offering is subject to market conditions, with no guarantee of completion or final terms. Citigroup, J.P. Morgan, and Truist Securities are lead book-running managers, while RBC Capital Markets, Goldman Sachs & Co. , and UBS Investment Bank are joint book-running managers. Stephens Inc. and Oppenheimer & Co. are co-managers.

Positive

• Potential to raise capital through the sale of 2,777,778 shares by the company

Negative

• Significant share dilution with 13,888,890 new shares being offered
• Majority of shares (11,111,112) sold by existing stockholders, not benefiting the company
• Potential further dilution if additional 2,083,332 shares are sold through underwriters' option

Financial Analyst

PACS Group's proposed offering of 13,888,890 shares signals a significant capital-raising event. The company aims to sell 2,777,778 shares, while existing stockholders offer 11,111,112 shares. This structure suggests a mixed strategy of raising new capital and providing liquidity for current investors. The additional 30-day option for underwriters to purchase up to 2,083,332 extra shares could further boost the offering's size.

The involvement of major financial institutions as lead book-running managers (Citigroup, J.P. Morgan, Truist Securities) and joint book-running managers (RBC Capital Markets, Goldman Sachs, UBS Investment Bank) lends credibility to the offering. However, investors should note that the offering's terms and completion are subject to market conditions, introducing an element of uncertainty.

For potential investors, it's important to review the S-1 filing for detailed financial information and risk factors before making any investment decisions. The market's reaction to this offering will be a key indicator of investor confidence in PACS Group's future prospects.

Market Research Analyst

This offering could significantly impact PACS Group's market position and liquidity. With 80% of the offered shares coming from existing stockholders, it suggests a potential shift in ownership structure. This large sell-off by insiders might raise questions about the company's future growth prospects or valuation.

The timing of this offering is crucial. If the market perceives it positively, it could boost PACS's stock price and trading volume. Conversely, if viewed negatively, it might lead to downward pressure on the stock. The 30-day option for additional shares adds another layer of complexity, potentially affecting supply and demand dynamics in the short term.

Investors should closely monitor the pricing of the offering and compare it to current market prices. A significant discount might indicate challenges in attracting investor interest, while pricing close to or above market price could signal strong demand. The success of this offering could also impact PACS's ability to raise capital in the future and influence investor perception of the company's long-term value proposition.

FARMINGTON, Utah--(BUSINESS WIRE)-- PACS Group, Inc. (NYSE: PACS) (“PACS” or the “Company”) today announced the commencement of an underwritten public offering of 13,888,890 shares of its common stock, including 2,777,778 shares of common stock sold by the Company and 11,111,112 shares of common stock sold by certain selling stockholders. The selling stockholders also expect to grant the underwriters a 30-day option to purchase up to an additional 2,083,332 of shares of common stock. PACS will not receive any proceeds from any sale of shares by the selling stockholders. The proposed offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.

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 related to the proposed offering (including the accompanying prospectus) has been filed with the U.S. Securities and Exchange Commission (the “SEC”) and is available on the SEC’s website located at www.sec.gov, but has not yet become effective. These securities may not be sold, nor may offers to buy these securities be accepted, prior to the time the registration statement becomes effective. The proposed offering will be made only by means of a prospectus. Copies of the preliminary prospectus relating to the proposed 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 over 29,000 patients daily.

Forward Looking Statements

This press release contains forward-looking statements. All statements other than statements of historical facts contained herein, including without limitation, statements regarding the expected completion, timing and size of the proposed public offering and the grant to the underwriters by the selling stockholders of an option to purchase additional shares, are forward-looking statements reflecting the current beliefs and expectations of PACS’s management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. No assurance can be given that the proposed offering discussed above will be completed on the terms described, or at all. Forward-looking statements represent PACS’s current expectations regarding future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially and adversely from those expressed or implied by the forward-looking statements. Among those risks and uncertainties are market conditions, including market interest rates, the trading price and volatility of PACS’s common stock, and risks relating to PACS’s business, including those risks and uncertainties described in periodic reports that PACS files from time to time with the SEC, as well as the registration statement on Form S-1 relating to the proposed offering filed with the SEC and the preliminary prospectus included therein. The forward-looking statements included in this press release speak only as of the date of this press release, and PACS does not undertake to update the statements included in this press release for subsequent developments, except as may be required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240903732723/en/

Brooks Stevenson, VP Corporate Communications

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

Source: PACS Group, Inc.

FAQ

How many shares of common stock is PACS Group (NYSE: PACS) offering in its public offering?

PACS Group is offering a total of 13,888,890 shares of common stock, with 2,777,778 shares sold by the company and 11,111,112 shares sold by certain selling stockholders.

Will PACS Group (NYSE: PACS) receive proceeds from all shares sold in the public offering?

No, PACS Group will only receive proceeds from the 2,777,778 shares sold by the company. The company will not receive any proceeds from the sale of 11,111,112 shares by selling stockholders.

Who are the lead book-running managers for PACS Group's (NYSE: PACS) public offering?

The lead book-running managers for PACS Group's public offering are Citigroup, J.P. Morgan, and Truist Securities.

Is there an additional option for underwriters in PACS Group's (NYSE: PACS) public offering?

Yes, the selling stockholders expect to grant the underwriters a 30-day option to purchase up to an additional 2,083,332 shares of common stock.