UHS Postpones Embattled IPO

Nearly three weeks after it had originally planned to reenter the public markets, Bloomington, Minn.-based Universal Hospital Services Inc. last Monday postponed its troubled IPO.

The deal had been designed to raise up to $75 million, but the company is not expected to launch any sort of private equity deal to make up the difference. If UHS does find itself in need of financial help, it would likely either try to extend its existing credit facility or pull more capital from majority shareholder J.W. Childs Associates.

In an official company statement, CEO David Dovenberg blamed the postponement on the always-popular “unfavorable IPO market conditions,” although UHS seemed to have worse timing than most.

The company was meeting with money managers from Morgan Stanley in midtown Manhattan on Sept. 11 when the Word Trade Center was attacked, and UHS executives were forced to drive a delivery van back to the Midwest. Once the road show resumed, lead underwriter UBS Warburg had a difficult time convincing investors to buy into the deal, despite lowering the offering price range and keeping the deal on a day-to-day status for three weeks.

UHS’ inability to go public could lead it to reconsider a handful of unsolicited acquisition bids, but J.W. Childs’ Steve Segal said such a move was unlikely.

“When you have an investment in a good company, there isn’t really any reason to rush out of it at a bad time,” he said.

Dan Primack can be contacted at:Daniel.Primack@tfn.com