IPO Sector: Shares of Team Health Holdings Inc. (Knoxville TN) closed the week higher after they debuted last Wednesday at a lower-than-expected price on the New York Stock Exchange. The hospital staffing and administrative support company said it sold 13.3 million shares at $12 each. The shares are trading under the symbol TMH. Both the amount of shares offered and the offer price are lower than the company's previous expectations. Team Health had said it expected to sell 20 million shares priced between $14 and $16 in its initial public offering. The company also had said that a selling shareholder, Ensemble Parent LLC, an affiliate of The Blackstone Group, would offer 9.3 million shares. But Team Health said it had provided all the shares in the offering. The company said it plans to use proceeds of about $146.5 million from the offering to redeem senior subordinated notes due in 2013. Team Health listed $612 million in total debt on its balance sheet in paperwork filed with the Securities and Exchange Commission before the offering. That concerned investors, President David Menlow said.
Menlow said he wasn't surprised by the lower debut price. He and other IPO analysts said this was a difficult time to debut a stock because many investors have already booked good returns on the year and are waiting for January. 'I didn't believe we were going to see anything that was going to move the needle of the scale of apathy because there wasn't anything out there that was an easy sell,' he said. Team Health does business with about 550 hospitals and related clinics in 46 states. Most of its revenue comes from providing staffing and services for hospital emergency departments. The company earned $55.2 million for the first nine months of 2009 on about $1.07 billion in revenue. Shares closed the week up $1.18, or 10% from its IPO price, at $13.18.
