SmileDirectClub priced shares for its public offering at $23 late Wednesday, two people familiar with the offering said, above the range the dental company had initially set for its listing.
The price would give SmileDirectClub an implied market capitalisation of $8.9bn, a more than two-fold increase from the $3.2bn valuation the company last received in private markets. It plans to list 58.5m shares worth $1.3bn in an offering on the Nasdaq stock exchange tomorrow.
The company had previously targeted a range of $19 to $22 a share.
SmileDirectClub, which sells clear teeth aligners directly to consumers for less than traditional orthodontists, is the latest lossmaking start-up to test public markets this year and one of the largest since WeWork’s public stumbles have thrown its $4bn listing into doubt.
The Nashville-based company reported a loss of $75m last year, even as revenues nearly tripled to $423m from the prior year. Its business has faced pushback from the American Association of Orthodontists, which has claimed in complaints with state attorneys-general and dental boards that the service is “illegal and creates medical risks”.
SmileDirectClub’s listing is expected to mint three new billionaires on paper: co-founders Jordan Katzman and Alex Fenkell and Katzman’s father David, who serves as the company’s chief executive and runs its private equity backer Camelot Venture Group. The company will list using a so-called up-C structure, providing tax advantages to company insiders that critics contend aren’t fully shared with other investors.
David Katzman will retain control of the company through supervoting shares that carry 10 times the weight of class A common stock being sold in the offering.
JPMorgan and Citigroup are serving as the lead underwriters for SmileDirectClub’s listing.