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Unilab IPO rises 44%
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June 6, 2001: 12:11 p.m. ET
Provider of lab test services gains $7 to $23 in mkt debut on Nasdaq
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NEW YORK (CNNfn) - Shares of Unilab Corp., a provider of lab testing services, rose nearly 44 percent in the company's market debut on the Nasdaq Wednesday.
Unilab gained $7 to close $23 Wednesday.
Tarzana, Calif.-based Unilab (ULAB: up $20.88 to $23.00, Research, Estimates) is the first initial public offering in nearly two weeks. The last offering, Smith & Wollensky Restaurant Group Inc., dropped nearly 9 percent in its market debut late last month.
However, all eyes are still on the huge $8.4 billion offering from Kraft Foods Inc., which is set to price next Tuesday and begin trading Wednesday. Kraft plans to offer 280 million shares at $27-to-$30 each via lead underwriters Credit Suisse First Boston and Salomon Smith Barney.
Kraft will trade under the New York Stock Exchange symbol "KFT."
The lack of IPOs being offered to investors gave the Unilab issue a boost, said David Menlow, president of IPOfinancial.com. "There is not enough supply for the demand out there," he said. "It's a very positive environment for IPOs to come out."
John Fitzgibbon, editor of Gaskins IPO Desktop, gave Unilab a four-star rating. "The stock is performing according to script," he said. "They are leaders of their industry and are profitable with a good growth rate going."
The Unilab offering has been on the fast track. Unilab initially filed with the Securities and Exchange Commission on May 3 to raise $115 million. The company then set its terms, 6.7 million shares at $14-to-$16 each, on May 16.
The lab test provider then raised $107.2 million late Tuesday, ahead of its IPO, when it sold 6.7 million shares at $16 each, the high end of its $14-to-$16 range, via lead underwriters Salomon Smith Barney and Credit Suisse First Boston.
"This is a stock that didn't need to go through any downward price revisions," IPOfinancial.com's Menlow said.
Unilab, one of the largest clinical lab testing companies in California, provides services to physicians, hospitals and managed care groups to treat and monitor diseases. Tests range from simple glucose monitoring to specialized ones that measure HIV infection and hepatitis C.
The company is profitable, with $3.2 million in income on $95.3 million in revenue for the quarter ended March 31.
After the IPO, buyout firm, Kelso & Co., via Kelso Investment Assoc., will own 57.4 percent. 
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