|
Healthcare IPO leads pack
|
 |
October 20, 2001: 7:00 a.m. ET
Slim New Issues Slate Features Cross Country and Penn Virginia
By Staff Writer Luisa Beltran
|
NEW YORK (CNNmoney) - Three companies will attempt to go public this week as investors continue to cope with the terrorist attacks last month and a spate of anthrax scares.
The market for initial public offerings has ground to a near halt this year. So far, only 64 offerings have gone public, raising $32.2 billion. This total is a far cry from last year's breath-taking pace when 410 IPOs raised $107.8 billion by mid-October 2000, according to data from Dealogic, an investment banking firm.
The fourth quarter is generally a busy time for IPOs but only two offerings have come to market since Sept. 11 making it the slowest time period since 1970.
Given Imaging Ltd., maker of a tiny camera that fits into a pill to help doctors diagnose internal ailments, went public earlier this month. TheraSense (THER: up $1.64 to $25.10, Research, Estimates) which makes glucose self-monitoring systems for people with diabetes, rose 31 percent in its market debut on Oct. 12.
The broad market, a barometer for new issues, surged early in the week and then petered out as numerous companies released quarterly results. The earnings season, typically a trying time for Wall Street, and anxiety over possible bioterrorism, put a damper on stocks. (Another media company employee, this time at the New York Post, tested positive Friday for Anthrax exposure.)
"The IPO market is being considered a luxury now," said David Menlow, president of IPOfinancial.com.
Until the broad market stabilizes, IPOs will probably remain scarce. But a trio of deals will attempt to launch this week, according to MCM CorporateWatch, which rates new issues.
Cross Country Inc., one of the largest providers of healthcare staffing services in the U.S., is expected to continue the strong healthcare trend for IPOs.
"Cross Country is probably the pick of the week," said John Fitzgibbon, editor of IPO Desktop. "It's a combination of healthcare and employment services."
Cross Country receives nearly 80 percent of its revenue from travel nurse staffing services. Boca Raton, Fla.-based Cross Country also offers other professional staffing such as radiology technicians, rehabilitation therapists and respiratory therapists. The healthcare provider has more than 2,500 clients all over the U.S.
Cross Country is also profitable with $407.7 million in revenue on $32.7 million in income from operations for the year ended Dec. 31.
Cross Country plans to sell 7.8 million shares at $15 to $17 each via lead underwriters Merrill Lynch and Salomon Smith Barney. The company expects to price Wednesday and trade Thursday under the Nasdaq symbol "CCRN."
Another energy IPO
The IPO from Radnor, Pa.-based Penn Virginia Resources Partners LP will likely continue the strength of the energy sector this year, said David Menlow, president of IPOfinancial.com.
"Penn Virginia expects to pay good dividends," he said. "This won't be a runaway but it will provide a semblance of perceived stability."
The company plans to sell 6.5 million units at $19.50 to $21.50 each via lead underwriters Lehman Brothers and UBS Warburg. Penn Virginia plans to price Wednesday and trade Thursday under the New York Stock Exchange symbol "PVR."
Penn Virginia Corp., which operates coal, natural gas and oil businesses, formed Penn Virginia Resources Partners as a limited partnership. Penn Virginia Corp. (PVA: up $1.12 to $35.22, Research, Estimates) owns 56 percent of the unit.
Penn Virginia Resources is selling units rather than shares and IPO analysts usually do not cover such transactions. As a limited partnership, Penn Virginia Resources anticipates making a quarterly distribution of 50 cents a unit or a yearly payment of $2 a unit.
The company does not operate any mines but enters into leases with operators to mine their coal reserves in exchange for royalty payments. Penn Virginia Resources produced 12.5 million tons of coal and had $24.3 million revenue in 2000.
Penn Virginia is profitable with $18.4 million in revenue on $13.2 million in income for the six months ended June 30.
A blue chip offering
Lastly, the huge offering from Principal Financial Group Inc. is expected to trade flat. The company is selling 100 million shares—85 million in the United States and 15 million internationally -- at $17 to $20 via Goldman Sachs.
"It's big and heavy so it won't move," said IPO Desktop's Fitzgibbon. "But it's a solid company."
Des Moines, Iowa-based Principal Financial is a leading provider of retirement and savings products with a focus on 401(k) plans in the United States. The company also offers investment and insurance products, online banking and mortgage loans.
The company, formerly known as Principal Mutual Holding Co., is converting from a mutual insurance company into a stock company.
Principal Financial has $116.9 billion in assets under management and about 13 million customers worldwide. Also, the company is in the black with $4.3 billion in revenue on $224 million in income for the six months ended June 30.
Principal plans to price Monday and trade Tuesday under the NYSE symbol "PFG." 
|
|
|
|
|
 |
|
