|
Cautious optimism for IPOs
|
 |
July 21, 2001: 7:00 a.m. ET
Two companies hope to take advantage of health care sector momentum
|
NEW YORK (CNNfn) - Initial public offerings continue their slow but steady progression this week, with four deals hoping to cash in on last week's strong finish.
According to analysts, the week looks promising with two IPOs in the resurgent health sector and solid offering from a semiconductor company.
Last Friday Natus Medical Inc. ended the week with a bang, closing up 31 percent from its offering price in a down day for the Nasdaq.
Analysts said Medcath Corp., which owns hospitals specializing in diagnosis and treatment of cardiovascular diseases, and Alliance Imaging Inc., which derives the lion's share of its revenue from MRIs, could both see a good, if not spectacular, first-day gain.
Both deals are coming out through lead underwriter Deutsche Banc Alex. Brown.
"We see the health care sector percolating, or at the risk of quoting a pun, we see a heartbeat in the sector," said David Menlow, president of IPOFinancial.com.
"This in not necessarily a potential strong sector, but it is one that will get IPO investors interest," Menlow said.
Medcath is looking to raise $150 million, pricing 6 million shares between $24 and $25.
The company lost $13.6 million last year, but had revenue in excess of $332 million.
"Medcath is certainly the one to watch ... because just in terms of customer base there's a lot of cardiovascular diseases," said Corey Ostman, co-CEO of Alert-IPO.com. "There's clearly a lot of demand and as with health companies in general that demand tends to grow with the population."
Medcath, which filed for its IPO in May, plans to trade under the symbol "MDTH" on the Nasdaq.
Alliance Imaging Inc. is also planning to raise $150 million, pricing 9.375 million share between $15 and $17 per share.
Ostman said diagnostic imaging continues to gain momentum and was not put off by the fact that the company pulled its offering and filed again this month.
"It looks like they were just testing the waters and are offering now they've seen some decent health care deals," he said.
Menlow the concern with the company withdrawing its offer earlier is that J.P. Morgan is no longer associated with the deal.
The company lost $2.2 million in 2000, with revenue of more than $345 million. Alliance will trade on the New York Stock Exchange as "AIQ."
Also on tap is PDF Solutions Inc., which provides infrastructure and services to improve the performance of semiconductors.
PDF plans to raise $54 million, pricing 4.5 million shares between $11 and $13. The company lost $145,000 with revenue of $11.8 million.
Menlow said the biggest indicator of this deal's strength is the increase in the price range on July 9. He also noted companies similar to PDF, Verisity and Simplex, did well despite flaws and an unsympathetic market.
"In spite of all the news about how the semiconductor market is in trouble, this is about what happens in the background," Menlow said. "This is a field that has worked."
The company will trade as "PDFS" on the Nasdaq and the lead underwriter is Credit Suisse First Boston.
The fourth IPO of the week is propane company Inergy LP, which is hoping to raise $34.4 million, pricing 1.6 million shares between $20.50 and $22.50, led by A.G. Edwards. It will trade as "NRGY" on the Nasdaq. 
|
|
|
|
|
 |
|
