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Defense firm leads IPO pack
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February 2, 2002: 7:00 a.m. ET
Online payment system PayPal to debut this week; four others on tap.
By Luisa Beltran
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NEW YORK (CNN/Money) - A technology defense contractor and an energy company looks set to continue the recent success of initial public offerings this week.
IPOs posted a strong debut last week with an offering from Synaptics (SYNA: up $0.19 to $13.17, Research, Estimates), a leading maker of interfaces, or "touch pads," for notebook computers, which rose 19 percent in its first day of trading Jan 29. Carolina Group Stock, the tracking stock of cigarette company Lorillard Inc., also gained nearly 4 percent in its debut last Friday.
This week, five IPOs are set to go public, according to MCM EquityWatch, which tracks new issues.
The week's strongest offering comes from ManTech International Corp., which provides information technology services to several clients of the U.S. government.
About 84 percent of ManTech's revenue come from customers in the intelligence community and the U.S. Department of Defense. ManTech also provides IT and technical services to the National Aeronautics and Space Administration, the Environmental Protection Agency and the Department of Justice.
Founded in 1968, Fairfax, Va.-based ManTech has been profitable but recently posted a $263,000 loss for the nine months ended Sept. 30 on revenue of $316.3 million. But for the previous five years the company has been in the black, said John Fitzgibbon, editor of IPO Desktop, who expects the IPO to rise by a $1.
The sector for defense stocks has surged since September's terrorist attack. United Defense Industries Inc. (UDI: up $0.66 to $25.66, Research, Estimates), which makes and designs combat vehicles, naval guns and missile launchers, rose 4 percent in its market debut in December.
"Defense stocks have been on a roll, particularly with the White House talking about increased spending in that area," Fitzgibbon said.
ManTech plans to sell 6 million shares at $14-to-$16 each via lead underwriter Jefferies & Co. ManTech plans to trade on the Nasdaq under the symbol MANT.
Another energy IPO
The energy sector produced some of the strongest IPOs last year. Gas turbine maker Global Power Equipment Group Inc. climbed 57 percent when it began to trade last year. Peabody Energy Corp., one of the world's largest coal companies, also rose nearly 31 percent.
Sunoco Logistics Partners LP is now the latest energy-related offering to come to market.
Parent Sunoco Inc. (SUN: down $0.01 to $38.55, Research, Estimates) formed Logistics Partners to own and operate a group of refined products and crude oil pipelines. The company's eastern pipeline operates in the Northwest and Midwest states while Sunoco's Western Pipeline transports crude in Oklahoma and Texas.
Sunoco Logistics is selling 5 million common units at $19-to-$21 each via lead underwriter Lehman Brothers. As a limited partnership, the company plans to pay a dividend of 45 cents a quarter, or $1.80 annually, Sunoco said in the filing.
Sunoco plans to trade under the New York Stock Exchange symbol SXL.
Online payments
EBay aficionados are very familiar with PayPal Inc., which is set to go public. Businesses or consumers with e-mail use PayPal to send and receive payments.
PayPal depends on online auction transactions for much of its volume. In fact, a significant portion of its business comes from eBay Inc., which owns a majority stake in rival eBay Online Payments.
About 68 percent of dollar volume made through the PayPal system comes from auction sites. PayPal has no contractual relationship with eBay, which could restrict use of PayPal advertising or compel sellers to use eBay Online Payments.
Launched in October 1999, Palo Alto, Calif.-based PayPal has a limited operating history and has never been profitable. The company had $264.7 million in losses as of Sept. 30.
Still the deal looks to be one of the best next week. Fitzgibbon, of IPO Desktop, gives the offering a three star rating and expects it to rise by $1 in its debut.
PayPal plans to sell 5.4 million shares at $12 to $14 each via Salomon Smith Barney. The company plans to trade under the Nasdaq symbol PYPL.
A biotech offering
Relatively absent last year, biotechs are returning to market this year. NeoGenesis Pharmaceuticals Inc., which develops drug discovery technology, is the second biotech-related IPO this year. ZymoGenetics, formerly a unit of Novo Nordisk A/S, went public last week. The Seattle-based company develops protein-based drugs.
NeoGenesis is focused on small-molecule drugs to treat human diseases. At the heart of its technology is its Automated Ligand Identification System that the company says will yield more small molecule drug candidates for clinical trials.
Cambridge, Mass.-based NeoGenesis has agreements with Biogen Inc., Schering-Plough Ltd., and Aventis Pharma SA.
Like most biotechs, NeoGenesis has sizeable losses and posted a $20.6 million deficit as of Sept. 30. The company also has yet to develop any drug products.
NeoGenesis plans to offer 6.2 million shares at $12 to $14 each via J.P. Morgan Chase. The biotech plans to trade under the Nasdaq symbol NGPI.
Lastly, a Russian manufacturer of dairy and fruit products will also attempt to float an IPO. Wimm-Bill-Dann Foods, of Moscow, derives nearly two-thirds of its revenue from the sale of dairy products.
As a foreign issue, the prospectus for the offering was unavailable. Wimm-Bill-Dann Foods plans to sell 12.2 million American depositary shares at $18.50-to-$21.50 each via ING Barings.
Wimm-Bill-Dann Foods plans to trade under the NYSE symbol WBD. 
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