Change Healthcare’s Initial Public Offering

Davis Polk advised McKesson Corporation on Change Healthcare Inc.’s SEC-registered initial public offering of 49,285,713 shares of its common stock.

The price to the public was $13 per share, including the full exercise by the underwriters of their option to purchase up to an additional 6,428,571 shares of common stock, and its concurrent SEC-registered offering of 5,750,000 of its 6.00% tangible equity units, with a stated amount of $50, including the full exercise by the underwriters of their option to purchase up to an additional 750,000 units. Change received net proceeds of $609 million from the common stock offering and $279 million from the units offering, in each case after deducting underwriting discounts and commissions. Change’s common stock and units are each listed on the Nasdaq Global Select Market under the symbols “CHNG” and “CHNGU,” respectively.

Change is a leading independent healthcare technology company that provides data and analytics-driven solutions to improve clinical, financial and patient engagement outcomes in the United States healthcare system. It is a key catalyst of a value-based healthcare system, accelerating the journey toward improved lives and healthier communities. Change was created in 2017 through the combination of substantially all of Change Healthcare Holdings, Inc.’s business and the majority of McKesson Technology Solutions. McKesson holds the majority ownership stake in Change’s operating subsidiary.

McKesson Corporation, currently ranked seventh on the Fortune 500, is a global leader in healthcare supply chain management solutions, retail pharmacy, community oncology and specialty care, and healthcare information technology. McKesson partners with pharmaceutical manufacturers, providers, pharmacies, governments and other organizations in healthcare to help provide the right medicines, medical products and healthcare services to the right patients at the right time, safely and cost-effectively.

The Davis Polk corporate team included partner Alan F. Denenberg (Picture) and counsel Jason Bassetti. Managing Partner Neil Barr and partner Patrick E. Sigmon provided tax advice. Counsel Gregory D. Hughes provided executive compensation advice.

Involved fees earner: Neil Barr – Davis Polk & Wardwell; Jason Bassetti – Davis Polk & Wardwell; Alan Denenberg – Davis Polk & Wardwell; Gregory Hughes – Davis Polk & Wardwell; Patrick Sigmon – Davis Polk & Wardwell;

Law Firms: Davis Polk & Wardwell;

Clients: McKesson Corporation;

Author: Ambrogio Visconti