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Premier $100M IPO a 'Pittance'

Margaret Dick Tocknell, for HealthLeaders Media, August 28, 2013

In announcing its plan for a $100 million initial public offering, the healthcare alliance and group purchasing organization may be actually setting its sights on a larger payday, says one healthcare economist.

The $100 million Premier Inc. plans to raise through an initial public offering is termed  "a pittance" by one industry observer and is likely "a placeholder" valuation.

In an e-mail exchange, Adam Powell, a healthcare economist and president of Payer+Provider Syndicate in Boston, noted that Premier had $869 million in total net revenue and $632 million in gross profit in fiscal year 2013. "The $100 million that Premier hopes to raise through the offering is a pittance."

That could mean Premier is actually setting its sights on a larger payday. Premier officials declined to comment citing the "quiet period" when Premier is subject to an SEC ban on talking about its stock.

The Charlotte-based healthcare alliance and group purchasing organization filed on Monday with the SEC a registration statement on Form S-1 regarding a proposed IPO of its Class A common stock. The number of shares to be offered and the price range for the offering have not yet been determined.

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