(Adds CEO comments, share movement)
June 10 (Reuters) - LifeStance Health Group Inc’s shares jumped over 11% in their Nasdaq debut on Thursday, giving the therapy provider a market value of nearly $7.5 billion and underscoring demand for mental health services during the COVID-19 pandemic.
Stock of the company, which is backed by an affiliate of buyout firm TPG, opened at $20, compared to the initial public offering price of $18 set on Wednesday.
LifeStance’s shares were trading almost 18% higher in afternoon trade.
LifeStance said it sold 40 million shares above the earlier target range, raising $720 million. Of the shares sold, 32.8 million were offered by LifeStance and around 7.2 million by the company’s existing investors.
TPG acquired a majority interest in the company in May 2020 at a total enterprise value of $1.2 billion, after which Summit Partners and Silversmith Capital Partners continued to hold a minority interest.
LifeStance’s debut comes as a mental illness crisis looms after millions of people worldwide were surrounded by death and disease and forced into isolation, poverty and anxiety by the pandemic. Health experts have also flagged concerns around evidence of higher risks of brain and mental health disorders among COVID-19 survivors.
“I think that (the pandemic) simply put a spotlight on mental health. There’s been a mental health crisis for a very long time,” said Chief Executive Officer Michael Lester.
Founded in 2017, LifeStance provides virtual and in-person outpatient mental health care for children, adolescents and adults experiencing a variety of mental health conditions including depression, anxiety disorder, Schizophrenia and PTSD.
The Scottsdale, Arizona-based company employs over 3,300 psychiatrists, advanced practice nurses, psychologists and therapists and currently operates 370 centers across 27 states in the United States.
Morgan Stanley, Goldman Sachs, J.P. Morgan and Jefferies are the lead underwriters for the offering. (Reporting by Noor Zainab Hussain in Bengaluru; Editing by Shailesh Kuber)