PACS Group properties are shown in a section of the company’s April 1 SEC Registration Statement. Credit:

PACS Group, one of the nation’s largest nursing home operators, could raise about $400 million in an initial public offering, according to a fresh round of documents filed this week.

Utah-based PACS plans to offer 19.05 million shares of common stock when it goes public, with an estimated price of $20 to $22 per share. At the top of that range, the move to the New York Stock Exchange could net the company $429 million in value.

The second round of filings with the Securities Exchange Commission further details how PACS plans to use the proceeds, and the role its leadership team would maintain after the sale. The company first disclosed its plans to become a public company on March 13. 

PACS was founded in 2013 and came to operate 208 facilities by early 2024.

The company is granting the IPO’s underwriters 30 days after the initial sale to buy up to an additional 2.8 million shares at a cut-rate price that reflects commissions. In all, nearly 148 million shares will be outstanding after the IPO, but PACS’ founders will maintain a healthy controlling majority, the regulatory filings show.

Those founders, listed as CEO Jason Murray and Executive Vice Chairman Mark Hancock, are expected to hold a combined 87% of total shares post-IPO, allowing them to appoint two board directors each. That structure ensures that as long as Murray and Hancock retain their stock, other stockholders will have little say in how the public company operates.

“This concentrated control … and the voting power of our common stock, will limit or preclude your ability to influence corporate matters for the foreseeable future, including with respect to the composition of our board of directors and election of directors, the authorization and issuance of additional shares of our common stock that may be dilutive to you, amendments to our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval,” PACS wrote in its April 1 amendment to an SEC Registration Statement.

The company plans to list as PACS on the NYSE. No date has been set for the IPO, though market watcher Renaissance Capital predicts the actual sale price will be set next week.

Some IPO prices exceed the estimates given in SEC filings, especially if market demand seems to be building.

PACS estimated it would receive midpoint proceeds of $370.3 million based on a $21 per-share price, and it intends to use $330 million to repay debts or for “general corporate purposes to support the growth of our business.”

“Additionally, we may use a portion of the net proceeds to acquire or invest in additional nursing facilities or other businesses and service offerings, although we do not have binding agreements or commitments for any material investments for which we would use the net proceeds of this offering at this time,” PACS wrote, echoing wording in earlier filings that the IPO would spur further growth.

The company’s business model is centered around local leadership, with a robust administrator-in-training program that feeds newly acquired buildings. 

“We have historically completed an average of approximately 20 acquisitions and one de-novo, or new-build, facility per year, but have the flexibility to increase or decrease this cadence from period to period in line with our business priorities and as strategic opportunities arise,” leaders wrote last month. “We plan to continue to strategically pursue opportunities within our pipeline to supplement our organic growth.”