Emdeon's $367m IPO is big deal for GA

General Atlantic invested $485m in the medical payment company - the largest ever amount it has put into a single portfolio company. Hellman & Friedman is also a backer of the company, which closed up strongly on the NYSE.

Emdeon, a Nashville-based medical payment-cycle manager, began trading strongly today on the New York Stock Exchange after having priced its initial public offering at $15.50 per share yesterday – the top of its expected range.

Emdeon had a closing price on its first day of trading of $16.52 on the NYSE.

Existing shareholders are selling $201 million-worth of shares in the offering, which in total will raise some $367 million. The IPO valued Emdeon, which had $205 million in EBITDA in 2008, at roughly $1.8 billion on a fully diluted basis. 

Greenwich, Connecticut-based private equity firm General Atlantic was the original backer of Emdeon’s spin-out in 2006 from former corporate parent HLTH, investing roughly $485 million in equity into the company in two tranches. This represents the largest-ever amount of equity invested in a single portfolio company for General Atlantic, according to a source familiar with the firm.

At close of trade today, Emdeon's value, factoring in the shares sold in the offering, had more than doubled the value of General Atlantic's equity in the company.

General Atlantic partners Jonathan Korngold and Mark Dzialga led the deal, and sit on Emdeon's board.

Last year General Atlantic asked private equity firm Hellman & Friedman to join it in purchasing the remaining Emdeon equity held by HLTH.

The offering is one of several recently completed or in the works from private equity sponsors. Another bellwether has been Avago Technologies, recently listed by Kohlberg Kravis Roberts and Silver Lake to great demand. It raised $648 million, making it the second largest US IPO in 2009 to date, and the company’s shares closed up nearly 8 percent on its first day of trading.