CAMBIAN, the provider of specialist behavioural health services, looks like having to settle for a valuation towards the lower end of the price range in its forthcoming flotation.
Market sources told City A.M. yesterday they expected the group, which has had a low-key marketing campaign, to price its new shares at a value that will give the group a market capitalisation of around £400m, rather than the £500m or so it would have had if it had been able to price its shares higher.
Most groups floating on the market since the New Year have ended up issuing shares towards the middle or top end of a designated price range.
The group announced its intention to float on Budget Day and has since proceeded to keep a low profile.
Cambian was founded in 2004 and has grown to become a significant partner to the UK government. The group includes the businesses of Cambian Healthcare, Cambian Education, Care Aspirations (trading as Cambian Learning Disabilities) and Advanced Childcare.
Advanced Childcare is a potential sore point for the group because a recent Ofsted survey highlighted that only one third of its homes were classified as good or outstanding.
Chief executive Saleem Asaria will sell part of his shareholding in the flotation but will be held to a lock-up period of 180 days in respect of the remainder of his stock. The precise details of his share sales and those of private equity owners G1 Partners will not be confirmed until later.
The advisers on the deal are JP Morgan, Numis, Canaccord Genuity and Rothschild. Cambian declined to comment.