Southern Cross was originally rumored to float in June and raise around £500 million, but those plans were put on hold due to the turbulent stock markets.
Chief Executive Philip Scott said: “We are delighted to have completed the IPO, particularly in light of the volatile market conditions in recent weeks.”
The company sold 88.9 million shares at 225 pence each, raising around £175 million for the company to reduce its debts and around £23 million for selling shareholder, Blackstone, which is reducing its holding in the business from 88% to 48 percent.
Blackstone acquired Southern Cross Healthcare in a secondary buyout transaction from
In November 2005, the business completed the acquisition of the leasehold interest of the Ashbourne Group of care homes. Totalling around 10,000 beds in 193 homes, this acquisition added significantly to the Southern Cross Group.
The enlarged company now operates some 573 care homes providing 28,000 beds with further growth anticipated in the elderly and specialist care divisions. Southern Cross is now the largest national provider of long-term care services.
West Private Equity acquired Southern Cross with co-investing partners and management in August 2002 for £80 million, comprising £35 million in equity and £45 million of debt financing. At the time, the business operated 139 care homes with 7,600 beds in the U.K.
The exit for Blackstone comes alongside the firm’s wildly successful closing of its latest fund, the $15.6 billion Blackstone Partners Fund IV.
The successful IPO of Southern Cross is a welcome victory for Blackstone, which had to postpone its planned floatation of Cineworld U.K. Ltd. Blackstone had filed to float the company in an IPO that would have valued Cineworld at around £450 million.
The New York-based firm, however, continues to profit from its floatation of Celanese last year. This past May, it announced a secondary offering of 35 million shares. Blackstone originally acquired the German chemical giant in 2004, after which it moved the business to the U.S. and re-listed the company’s stock on the New York Stock Exchange.