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Accelerated soars 219%
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June 23, 2000: 6:28 p.m. ET
Telecom tech provider triples offering price; three other issues also climb
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NEW YORK (CNNfn) - The new issues market sprang to life Friday as four deals produced strong gains. Accelerated Networks Inc., a telecommunications technology provider, quickly emerged as the top one, surging more than 219 percent.
Charles River Laboratories Holding Inc., a breeder of rats and mice for drug research, climbed 37.5 percent, while Manufacturers Services Ltd., a provider of manufacturing services, rose 33 percent. Qualstar, Friday's smallest deal, inched up 15 percent.
However, any hopes of a rebound for the initial public offering market are premature, analysts said.
"The IPO market gives the outward appearance of a rebound but that is a false sense of confidence," said David Menlow, president of IPOfinancial.com. "The market is firming up and there are definitely upgrades but not all the signs are clear."
Only certain companies — those in hot sectors such as infrastructure and businesses with fundamentals — can produce a strong IPO in these current conditions, said Francis Gaskins, editor of Gaskins IPO Desktop in Los Angeles.
"It's not a rebound for everyone," Gaskins said.
Accelerated speeds up
Accelerated Networks Inc. more than tripled its offer price Friday, rising 32-7/8 to 47-7/8. Accelerated raised $60 million after pricing 4 million shares at $15 each, above the expected range of $11-to-$13, through underwriters led by Credit Suisse First Boston.
Accelerated Networks's performance is the best since the market debut of ONI Systems, an optical networking equipment provider, which on June 1 climbed 230 percent. ONI Systems (ONIS: Research, Estimates) plunged 21-1/4 to 115-1/2.
 The need for speedy Internet service offering voice and data spurred Accelerated's rise.
"Accelerated is in a really sweet space," Gaskins said. "They're a voice and data gateway."
Accelerated also benefited from its top venture capital backing, Gaskins said. After the IPO, entities associates with New Enterprise Associates will hold a 13.3 percent stake while entities associated with U.S. Venture Partners will also own 13.3 percent.
Moorepark, Calif.-based Accelerated makes and markets telecommunications products that let service providers offer multiple voice and data services using broadband technologies such as digital subscriber lines. Accelerated caters primarily to service providers such as Siemens ICN, CTC Communications Group Inc., and First World Communications.
Accelerated's Chief Executive Suresh Nihalani told CNNfn that the company's products help service providers bundle voice and data services over a single broadband line. (349K AIFF) or (349 WAV)
Accelerated Networks (ACCL: Research, Estimates) plans to use proceeds for working capital and other general corporate purposes.
The company competes with other providers of broadband access products including Cisco Systems, Alcatel SA, Lucent Technologies Inc., and Nortel Networks.
For the three months ended March 31, the company reported a net loss of $8.8 million on revenue of $7.2 million, compared with a net loss of $3.8 million on no revenue for the year-ago period.
Of mice and rats
Charles River Laboratories Holding Inc. joined the positive trend Friday, climbing 6 to 22. The company raised $224 million after pricing 14 million shares at $16 each through underwriters led by Donaldson Lufkin & Jenrette, a boost in issue size from the originally filed 12 million shares at $16-to-$17.
Wilmington, Mass.-based Charles River breeds genetically and virally defined rats and mice for research models that are used to develop drugs and therapies.
Charles River Laboratories (CRL: Research, Estimates) sells its small animal research models to pharmaceutical and biotechnology companies, as well as hospitals and academic institutions.
For the three months ended March 25, the company reported net income of $636,000 on sales of $69.3 million, compared to net income of $7.1 million on sales of $52.3 million a year earlier.
The company plans to use proceeds to repay debt.
Manufacturers Services
Manufacturers Services Ltd. climbed 5-1/4 to 21-1/4, a 33 percent gain in its market debut.
Manufacturers Services Ltd. raised $176 million after pricing 11 million shares at $16 each through underwriters led by Donaldson Lufkin & Jenrette. Price talk was 11 million shares at $15-to-$17 each.
Concord, Mass.-based Manufacturers Services provides product design and testing services as well as order fulfillment and distribution to original equipment manufacturers on a global scale. The four-year-old company assists clients such as 3Com Corp., Hewlett-Packard Co. and International Business Machines Corp. to cut the time it takes to bring products to market and helps optimize the product design for high volume manufacturing.
Manufacturers Services (MSV: Research, Estimates) will use proceeds to retire all outstanding preferred stock and to repay debt.
For the year ended Dec. 31, Manufacturers Services reported operating income of $16.4 million on sales of $920.7 million compared with operating income of $8.7 million on sales of $838 million a the year before.
Managing data
Qualstar Corp. was the smallest deal to begin trading. Qualstar inched up 23/32 to 7-23/32 after raising $17.5 million in a deal underwritten by First Security Van Kasper and Needham & Co. Qualstar priced 2.5 million shares at $7 each, the bottom of the $7 to $9 range. The issue, in registration since February, was cut from the originally expected 3.25 million at $10-to-$12 each.
Canoga Park, Calif.-based Qualstar Corp. designs and manufactures automated magnetic tape libraries that are used to store and manage data in networks. The tape libraries are compatible with UNIX, Windows NT, NetWare and Linux operating systems.
Qualstar Corp. (QBAK: Research, Estimates) plans to use proceeds for leasehold improvements, sales and marketing, research and development, capital expenditures, working capital and other general corporate purposes. 
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Accelerated Networks
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