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Lone IPO hopes to continue streak
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November 24, 2001: 7:00 a.m. ET
MCG to sell 14M shares at $17 to $19 via Friedman, Pru $3B IPO expected Dec. 12
By Staff Writer Luisa Beltran
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NEW YORK (CNN/Money) - Only one initial public offering, from MCG Capital Corp., will attempt to continue the recent success of new issues this week.
Long dormant for much of the year, IPOs have staged a mini-rebound of late. Magma Design Automation Inc., a provider of chip technology software, surged nearly 50 percent last week, making it one of the best IPO debuts this year.
The Magma (LAVA: up $0.13 to $18.83, Research, Estimates) offering followed the successful issue from Weight Watchers International (WTW: up $0.45 to $31.70, Research, Estimates) which in mid-November gained nearly 23 percent in its IPO. Before that, three IPOs -- AMN Healthcare Services Inc., Advisory Board Co. and Fisher & Paykel Industries Ltd. -- also surged in their first day of trade.
But the offering from VCA Antech Inc. (WOOF: up $0.24 to $9.58, Research, Estimates) last Wednesday broke this winning streak when it slid 7 percent below its offering price.
The market continued to improve in November when 12 new issues raised $1.4 billion compared to October which saw only 8 IPOs. No companies made their market debuts during the month of September.
But IPOs are still far from the pace set last year. Only 83 deals have gone public in 2001, raising $37.9 billion compared to 427 issues last year that totaled $104.4 billion in funds, according to data from Dealogic, a New York-based investment banking research firm.
"The IPO market is in recovery but it's not back," said John Fitzgibbon, editor of IPO Desktop.
December continues to show activity with seven IPOs on calendar and another four waiting on the sidelines, Fitzgibbon said. Most eyes will be on the much-anticipated $3 billion offering from insurance firm Prudential Financial Inc., which is slated to price Dec. 12 and trade the following day, underwriters on the deal said.
Prudential, which will trade as "PRU," plans to sell 110 million shares at $25 to $30 each via lead underwriters Goldman Sachs. Of the total shares, 93.5 million will be sold in the United States while 16.5 million will be sold internationally.
The lone IPO
Fresh from the Thanksgiving holiday, only MCG Capital Corp. will attempt to go public this week, according to MCM EquityWatch, which tracks new issues.
Arlington, Va.-based MCG invests in small and medium-sized companies in the media, communications, technology and information services sectors.
MCG has major financial ties and originally was a division of First Union Bank. In 1998, MCG's management and Goldman Sachs & Co. acquired the unit in a buyout. After the IPO, entities affiliated with Goldman Sachs will hold a 21 percent stake while Heller Financial will have nearly 4 percent.
MCG is profitable, though income has dropped by nearly 17 percent to $7 million for the nine months ended Sept. 30 from $8.4 million for the same time period last year.
MCG is similar to CMGI Inc. (CMGI: up $0.14 to $2.44, Research, Estimates), the former net-incubator that has been hard hit by the decline in technology stocks.
MCG plans to sell 14 million shares at $17 to $19 each via Friedman, Billings, Ramsey & Co.
"MCG will be priced to sell and with Goldman Sachs's name in there, the IPO has credibility," Fitzgibbon said. However, he thinks the deal will gain by only 50 cents in its first day.
Before the Internet boom of the late 1990, the investment bank of Friedman, Billings built a solid reputation on financial services transactions.
MCG plans to trade under the Nasdaq symbol "MCGC." 
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