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Afya’s IPO Sees Strong Listing Gains


Nov. 20 2020, Updated 4:02 p.m. ET

Afya’s IPO

Afya (AFYA) listed on the Nasdaq Global Select Market on July 19. The company priced its IPO at $19 per share, $1 above its initial price range. While filing for its IPO, Afya provided a price range of $16–$18. The stock is up almost 20% as of 3:00 PM ET. Afya offered a total of 13,744,210 Class A common shares. Of these shares, the company is issuing 11,827,256 Class A common shares, and existing investors are selling 1,916,954 shares.

According to Reuters, “The company and its shareholders, including Brazilian private equity firm Crescera Investimentos SA, together raised around $300 million in the share offering. Demand for Afya’s shares surpassed 13 times the amount of shares offered.”

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About Afya

Afya is a Brazilian medical education company. It’s a leader in the Brazilian market based on its total number of medical seats. Afya was born of the joint venture of NRE Educational colleges and Medcel. NRE Educational colleges boasts the highest number of medical students in Brazil. Medcel is “an EdTech leader in prep and update courses for medical residency exams.”

According to Afya, “Along our path, we have helped more than 100,000 physicians during all stages of their academic and professional lives.” Afya’s campuses are present in 12 Brazilian states. Afya had 14 undergraduate and graduate medical campuses as of March 31 this year.

What Afya intends to do with the IPO money

According to Afya, “We intend to use the net proceeds from this offering to fund future acquisitions (including at least 1,000 medical school seats) and investments in complementary businesses, products or technologies.” It continued, “Any remaining net proceeds will be used for general corporate purposes. We will have broad discretion in allocating the net proceeds from this offering.”

The financials

Afya posted revenue of $85.7 million in 2018—a year-over-year rise of 55%. Afya reported a net income of $24.3 million in the year. It generated a net income of $12.7 million in the first quarter of 2019. The company reported operating cash flows of $14.8 million in the quarter. Its operating cash conversion ratio was 90.4% over the period. The metric stood at 71.7% in 2018. Operating cash flow conversion is a non-generally accepted accounting principles measure. Afya defines it as “cash flows from operations divided by Adjusted EBITDA plus/minus non-recurring expenses.”

Check out our Healthcare page for more analysis.


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