Ardent Health Partners, a prominent hospital operator, has initiated steps towards an initial public offering (IPO), as indicated by the regulatory documents submitted on Friday. This move marks a significant milestone for the company, which is supported by an investment firm founded by the late Sam Zell, a notable real estate magnate. Ardent has applied to list its stock on the New York Stock Exchange under the ticker symbol “ARDT.” Although the exact number of shares to be offered has not yet been disclosed, the IPO will be underwritten by major financial institutions including J.P. Morgan, BofA Securities, and Morgan Stanley.
The financial performance of Ardent has shown a positive trend, with the company reporting revenues of $1.44 billion in the first quarter of this year, up from $1.32 billion in the corresponding period of the previous year. This increase in revenue is accompanied by a rise in net earnings, which reached $46 million in the three months ending March 31, compared to $24 million during the same timeframe in 2023. Despite this financial disclosure, the company has not provided a per-share earnings breakdown.
A significant portion of Ardent’s revenue is derived from government healthcare programs, which presents both opportunities and risks. The company highlighted in its filing that approximately 39.5% of its total revenue last year was connected to the Medicare program, with an additional 11.2% related to state Medicaid programs. This reliance on government programs means that changes in Medicare and Medicaid payments, as well as private operator reimbursements, are critical factors that could impact the company’s financial health.
Ardent’s journey to the IPO has seen previous attempts; the company first filed for an IPO in 2018 but withdrew the application in January 2020. This renewed effort to go public comes with the backing of EGI-AM Investments LLC, an affiliate of Equity Group Investments, founded by Zell. Despite Zell’s passing last year at the age of 81, his firm remains a controlling force in Ardent’s structure.
Post-IPO, EGI-AM Investments will continue to exert significant influence over Ardent. The specific percentage of voting power that EGI-AM will hold has not been disclosed in the filing, but it has been made clear that as long as EGI-AM owns 50% or more of the total voting power, it will retain the right to nominate a majority of Ardent’s directors and select the board’s chair. Additionally, ALH Holdings LLC, a subsidiary of Ventas Inc., is granted the right to nominate one director to Ardent’s board.
This structured control is part of a broader agreement between EGI-AM and Ventas Inc.’s subsidiary, ensuring that EGI-AM maintains a pivotal role in Ardent’s governance. This setup reflects the strategic interests of these major stakeholders in guiding the company’s future, particularly as it navigates the complexities and opportunities of being a publicly traded entity.
Ardent Health Partners’ IPO represents a crucial step in its growth trajectory, aiming to leverage the public market to further its mission and expand its reach in the healthcare sector. The company’s financial performance, strategic backing, and planned governance structure post-IPO all play integral roles in shaping investor confidence and the potential success of this public offering.