By Arasu Kannagi Basil and Echo Wang
(Reuters) – Shares of Waystar fell on their Nasdaq debut on Friday after the health care payments company raised $968 million in its U.S. initial public offering in what was one of the biggest deals of the year.
The company’s shares opened at $21, slightly below its IPO price of $21.50, giving it a valuation of $3.50 billion. The stock traded as high as its IPO price earlier in the session before closing at $20.70.
Waystar, backed by a Swedish private equity firm EQT AB (ST:) and Canadian pension fund giant CPPIB sold 45 million shares in the offering.
Progress on Waystar’s IPO shows the market remains open for new listings after aluminum recycler Novelis made its stock market debut, reportedly raising as much as $945 million earlier this week.
The company, which was formed in 2017 from the merger of Navicure and ZirMed, develops payment software that allows customers such as large hospital systems to collect bills from patients.
EQT and CPPIB acquired a majority stake in Waystar from alternative investment firm Bain Capital in 2019, valuing the company at $2.7 billion. Bain remained as a minority shareholder.
Investment management firm Neuberger Berman and sovereign wealth fund Qatar Investment Authority had indicated they were interested in buying shares worth up to $225 million in the IPO.
REDUCE DEBT
Under EQT and CPPIB ownership, Waystar has gained scale by acquiring some of its rivals, including eSolutions in 2020, strengthening its presence in the lucrative health insurance market for the elderly known as Medicare.
Waystar plans to use the proceeds from the IPO to repay outstanding debt.
“We are using the proceeds from the IPO to reduce our debt and exposure and improve our capital structure and truly effectively position the company for the long-term sustainable path of continuing to transform a healthcare industry,” said Waystar CEO Matt Hawkins (NASDAQ:) told Reuters in an interview.
Goldman Sachs, JP Morgan Securities and Barclays Capital were the lead underwriters for the IPO.
