War IPOs dominate
Anteon International offering is the third defense/intelligence transaction this year.
March 9, 2002: 7:00 a.m. ET
By Staff Writer Luisa Beltran
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NEW YORK (CNN/Money) - The war in Afghanistan continues to prop up the market for new issues as yet another defense-related firm, Anteon International Corp., looks to tap the equities markets this week.
Last week, no new issues opened for trade, and only three initial public offerings are now expected, according to MCM Equity Watch.
Fairfax, Va.-based Anteon, which provides information technology mainly to the U.S. government, hopes to take advantage of the current market for war with defense spending expected to jump 12 percent in 2002 and 14 percent in 2003.
The U.S. government accounts for nearly 90 percent of Anteon's business.
The sector for defense/intelligence offerings is one of the few to show strength this year. Anteon is the third such IPO in 2002 and the fourth in the past several months.
In February, Integrated Defense Technologies Inc. (IDE: up $0.60 to $25.70, Research, Estimates), a provider of technology to the U.S. military, rose 12 percent. ManTech Corp., which offers information technology services primarily to the U.S. Department of Defense, gained 14 percent last month.
United Defense Industries (UDI: unchanged at $27.85, Research, Estimates), which makes and designs combat vehicles, naval guns and missile launchers, rose 4 percent in its market debut in December.
Anteon provides systems engineering services primarily to the defense community. The company's services allow clients to manage their mission systems, which include ships, aircraft, weapons and communications. For the U.S. Navy, Anteon provides the systems testing and threat analysis used in its radar, missile and command and control systems.
Anteon also built and is upgrading the National Emergency Management Information System for the Federal Emergency Management Agency (FEMA).
Like most defense-related offerings, Anteon is profitable. The company had $26.8 million in operating income on $715 million in revenue for the year ended Dec. 31 compared to $21 million in operating income on $542.8 million in revenue for the same time in 2000.
Anteon is offering 12.5 million shares at $15 to $17 each via bookrunner Goldman Sachs. The company plans to trade under ANT on the New York Stock Exchange.
Industry analysts say the Anteon IPO could surge as much as 25 percent in its first day, while John Fitzgibbon, editor of IPO Desktop, said it could rise by $1-to-$2.
Driving to gains
Asbury Automotive Group Inc., one of the nation's largest auto retailers, also is planning to go public. Asbury operates 127 franchises through 91 dealer locations in the United States.
New vehicle sales accounted for much of Asbury's revenue. The company had $123.4 million in income from operations on $4.3 billion total revenue for the year ended Dec. 31 compared with $122 million in income from operations on $4 billion in revenue for the year before.
Stamford, Conn.-based Asbury plans to sell 7.7 million shares at $15 to $17 each via co-lead underwriters Goldman Sachs and Merrill Lynch. The company plans to trade under the NYSE symbol ABG.
Lastly, a homebuilding and real estate services company is also planning to launch an IPO. WCI Communities Inc. designs and constructs retirement homes and luxury towers for the affluent buyer in Florida.
WCI adds amenities such as golf courses, tennis courts and country clubs to their communities.
Bonita Spring, Fla.-based WCI plans to sell 6.9 million shares at $17-to-$19 each via UBS Warburg and Credit Suisse First Boston. The company expects to trade, also on the NYSE, under the symbol WCI. 
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