Inovalon Rises 25% In IPO

Shares of Inovalon Holdings Inc, a healthcare data analytics firm, jumped 25 percent in their market debut after the company priced its shares above the expected price range. Shortly after it started trading on the Nasdaq, the stock touched $33.75, valuing Inovalon at about $4.88 billion. This is the second time it has raised its share price since the IPO was announced on Dec 30. Inovalon runs a cloud-based data analytics platform that tracks the efficiency and cost of health care services for payors, providers and pharmacies.

The strong customer base, a profitable record and growth prospects for its analytics technology helped the company stand out, even as several companies struggled to price their IPOs this week. Inavolan raised $600 million from its initial public offering of 22.2 million class A shares, making it the biggest offering of the year after Columbia Pipeline Partners raised $1 billion last week. The company’s shares were priced at $27 each, above the expected price range of $24 to $26 and up from an initial $21 to $24 due to strong demand.

Inovalon uses predictive algorithms to suggest health conditions by analysing data stored in its registry which contains more than 9.2 billion medical events from over 120 million unique patients. Its customers include some of the largest health insurers in the United States. Blue Cross Blue Shield of Michigan, EmblemHealth, HealthFirst, and WellCare Health Plans Inc each accounted for 10 to 12 percent of its revenue in 2013.

Chairman and Chief Executive Officer Keith Dunleavy is the biggest shareholder with a 44.8 percent stake. He did not sell any shares in the IPO. Goldman Sachs & Co, Morgan Stanley and Citigroup were the lead underwriters of the offering. Inovalon was founded in 1998 and reported $336 million in sales for the year ending Sept 30, 2014.

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