Fortis Corp., the Irvine-based provider of medical cost-containment and managed health-care services, netted about $4 million from its recently completed initial public offering and hopes to use the money to expand its operations by a third over the next two years.
The company, which was spun off from Minneapolis-based North Star Universal Inc., sold 1.5 million shares of stock at $10 per share in the offering, which closed Monday. About $9.9 million went to redeem North Star Universal's preferred stock. North Star still owns 49% of the company, although stock options held by company president Gordon Clemons, if exercised, could significantly reduce that stake.
Fortis will use the $4 million left after the payment of underwriting fees to supplement working capital and keep the company on the growth course it has followed over the past three years, when it increased the number of offices nationwide from 30 to 70.
Clemons said Fortis plans to add about 25 new offices by mid-1993.
The company has about 1,100 clients, most of them companies that specialize in workers' compensation insurance. Fortis provides two primary services: management of workers' compensation cases, in which a vocational counselor or nurse is assigned to an injured worker to assist their recovery and return to work, if possible, and medical claims review and cost-containment.
Fortis earned $685,000 on revenue of $28.9 million in the fiscal year ended March 31. The previous year, it lost $754,000 on $20.3 million in revenue.