Cruz Blanca Set for IPO

Chile’s Cruz Blanca is set to announce pricing today on its IPO and could raise more than $250m. Market expectations are for a CLP550-CLP600 per share price for the sale of 122m in primary shares and up to 100m in secondary shares, implying a size of anywhere between CLP122.1bn-133.2bn ($258m-$281m). Local brokerage Security sees health-care spending doubling over the next 10 years and recommends buying the IPO at CLP560 with a 12-month target of CLP700. The health services provider has been marketing in LatAm, the US and UK, as it prepares to float up to 35% of the company. It follows pharmaceutical company CF Recalcine, which raised $368m equivalent last month, adding some sorely needed diversity to Chile’s equity market. Like Recalcine, Cruz Blanca is an expansion play, with 65% of proceeds slated for investments. The company is looking to grow through acquisitions and organically and has plans to open new locations for its Integramedica walk-in clinics as well as renovate its 3 brands of medical centers. The other 35% would be used to repay debt. Bice, Celfin and IMTrust are managing the sale. The issuer, owned by Grupo Said and Linzor Capital, was founded in 1999, though the Cruz Blanca brand was created in 2008 with the acquisition of health insurer Isapre ING. The health insurance operations represent 74% of Cruz Blanca’s business, according to the prospectus. Its total 2010 Ebitda was $31.2m equivalent. Cruz Blanca claims 20% of the market in Chile, covering 530,000 people, according to its website.