Change Healthcare files for $100M IPO to offset debts

The company will be listing its shares on the Nasdaq exchange, and has hired Barclays, Goldman Sachs and JP Morgan as its underwriters.
By Dave Muoio
03:14 pm

Nashville, Tennessee-based Change Healthcare, a health IT company currently owned by a joint venture of McKesson, Blackstone and Hellman & Friedman, has filed to raise $100 million in an upcoming IPO. The company has hired Barclays, Goldman Sachs and JP Morgan as its underwriters, and plans to list its shares on the Nasdaq stock exchange.

In the filing, Change Healthcare wrote that it will put the net proceeds from the IPO toward paying off the debts accrued by the McKesson-Blackstone-Hellman & Friedman joint venture.

Change’s business is led by its Intelligent Healthcare Network product, a data analytics platform for healthcare customers seeking to improve reimbursement, patient engagement, quality reporting and other processes.

According to the filing, it handled nearly 14 billion healthcare transactions and roughly $1 trillion in adjudicated claims during the fiscal year ending in March 2018. Change’s current customer base is comprised of roughly 5,500 hospitals, 2,200 public and private payers, 33,000 pharmacies, 600 laboratories, 900,000 physicians and 118,000 dentists, according to the company.

The business was founded in 1986 as revenue cycle management and data analytics company Emdeon, but rebranded after acquiring patient engagement company Change Healthcare for $135 million roughly half a decade ago. In 2017 it merged its business with much of McKesson Technology Solutions to become the entity it is today.


Despite frequent funding and investor interestanalysts have highlighted the dearth of high-profile IPOs among healthcare technology companies over the last few years — this month’s news that Livongo was eyeing a 2019 listing was a noteworthy outlier. However, unlike Livongo and other digital health startups before it, the filing characterizes Change’s IPO as less of a successful exit, and more of a chance for the established IT company to recoup some of its expenses.


Change has been pushing its business forward over the past few months with new products and announcements. Chief among these was the company’s acquisition of blockchain API startup PokitDok’s IP and staff, and the subsequent launch of its enterprise-scale blockchain network just a short time later. At HIMSS 2019, the company announced an AI product able to assist with claims management.


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