Cruz Blanca IPO Misses Expectations

Chilean health-care provide Cruz Blanca has priced a CLP111.0bn ($234m) IPO below its floor price, raising less than the $250m anticipated by the market. The 122m primary and 100m secondary share sale priced at CLP500 each, with the issuer opting to come below the CLP525 minimum floor that it had set earlier. Analysts had recommended buying at up to CLP550-CLP600, well above the CLP497.81 closing price on the first day of trading. Total demand came in at CLP444.9bn from 1,348 orders. Retail accounted for 14% of demand, 4.5% went to employees and others linked to Cruz Blanca, with the remainder going to Chilean and international non-retail investors. The sale adds diversity to Chile’s health sector, seen as a play on growth and rising incomes, with spending in the sector expected to double in the next 10 years. Sixty five percent of the proceeds are slated for investments as the company looks to grow through acquisitions and organically. It 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% will go to repay debt. Bice, Celfin and IMTrust managed 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. Cruz Blanca claims 20% of the market in Chile, covering 530,000 people.