Healtheon set a tentative price of US$6 to $8 for each share to be sold in its initial public offering later this month, a price that would raise as much as $63 million for the health-care software company.
The vendor of Internet-based software said it plans to sell 6.5 million to the public. A group of investors, led by Healtheon chairman and Netscape cofounder Jim Clark, may buy an additional 3.2 million shares at the initial offering price.
The company hopes to raise the money from the combined proceeds of the offering and the sale to Clark and friends. About $1.5 million will be used to pay off short-term debts. The rest will be used to cover general corporate expenses and to beef up its portfolio of products acquired from buyouts of companies with complementary technology.
Healtheon needs partners to achieve its goal of wrenching the paper-choked health-care industry into the Internet age. It hopes to sell Net-based work-flow applications to every niche of the industry. Currently, it has products in development for hospitals and physicians groups, as well as for firms that broker relationships between hospitals and HMOs. It also sells benefits-administration software to insurers and HMOs.
The company expects to bring in revenue of about $80 million in 1998, but foresees losses through the end of the decade.
Healtheon will have 61.4 million shares outstanding following the offering, which will be jointly underwritten by Morgan Stanley Dean Witter and Goldman, Sachs. Clark, who will own nearly 18 percent of those shares, stands to make about $90 million on paper if the offering goes off as planned.
