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Big IPO week on the cards
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November 10, 2001: 7:32 a.m. ET
IPO market gets going with the most deals scheduled in nearly six months.
By Staff Writer Kim Khan
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NEW YORK (CNN/Money) - The initial public offering market is doing more than simply showing signs of life this week; it's out of the hospital and running down the street with the most deals on the cards in nearly six months.
And who better to come to life the new issues market out of the sick bed than the health-care sector, which again dominates the schedule.
Six IPOs are expected this week, with companies hoping to raise nearly $900 million altogether, according MCM EquityWatch, which tracks new issues.
That's the most deals since the week of May 14, when 6 IPOs raised $2.1 billion, according to Dealogic, a New York-based investment banking research firm.
IPO analysts expressed optimism about the number of IPOs this week, noting investment banks are making the most of this period getting their best deals out after a very slow year.
"Bankers have lost a lot of time and they're putting out the deals they want and need to work," said Mike Falbo, analyst with IPOPros.com. "Next week is a really amazing week."
Falbo said the market will continue perform well through the rest of the year, with the only exception being the holiday week of Thanksgiving.
But Mark Baum, CEO of IPO.com, was hesitant to proclaim the IPO market "back."
"Everybody asks me that question, but my question is, 'Back to what?'" Baum said. "The IPO market is going to reflect the general health of underlying markets."
He said if the market can put together a sustained activity then things will be looking strong.
To do that Baum said "people have to be comfortable that the underlying equity markets are reflecting the overall health of the economy."
David Menlow, president of IPOFinancial.com, said it appears the market is heading to bigger and better things now, noting this week promises more deals than all of October.
But Baum cautioned investors to consider whether the markets, which have made a strong turnaround from the Sept. 11 attacks, have over-recovered and are now overvalued.
Weight Watchers tips the scales :centered
Ironically, Weight Watchers International is the biggest IPO this week, looking to raise about $382.8 million, and analysts said this offering is the highlight.
"I don't know somebody as well-positioned as they are," Falbo said. "We've seen a lot of deals of this kind of caliber do very well, not only on first-day gain but also with long-term growth - Kraft, for instance."
"Weight Watchers sells itself," Menlow said. "It's not just a food stock as some are calling it. They are the biggest and best at what they do."
Weight Watchers plans to price 17 million shares between $21 and $23 per share through lead underwriters Credit Suisse First Boston and Goldman Sachs.
The Woodbury, N.Y.-based company had revenue $436.4 million in 2000, with net income of $37.5 million.
"(Weight Watchers) has a brand and has held up over time," Baum said. "It's had a history profitability and revenue growth."
Weight Watchers plans to trade as "WTW" on the New York Stock Exchange.
Health care still the rage
Four of the remaining IPOs are in the health-care sector, which continues to proves popular with investors.
"Investors are into the health industry right now," Flabo said. "IPOs come in waves and this sector is hot."
DJ Orthopedics Inc., which makes sports medicine products, is the second-largest deal on tap. The company plans to raise about $153 million, pricing 9 million shares between $16 and $18 per share.
It will trade as "DJO" on the New York Stock Exchange led by Goldman Sachs and J.P. Morgan.
"This company is growing about 18 percent per year and it's what the markets are looking for right now," Menlow said. "But we're cautiously optimistic about these (health) stocks because at some point these healthcare stocks are going to be overdone."
"Will they hold up in the aftermarket?" he said.
Find more IPO information here
Another medical device company gearing to go public is Fisher & Paykel Industries Ltd., a New Zealand-based company that makes heated humidification products for use in respiratory care.
Led by Deutsche Banc Alex. Brown, the company hopes to price 4.4 million American depositary receipts (ADRs) at between $16 and $18 per share, raising about $74.8 million.
Fisher & Paykel will trade as "FPHC" on the Nasdaq.
Both Fisher and Paykel and DJ Orthopedics are profitable, each with annual net income of about $5 million.
Temporary health-care staffing company AMN Healthcare Services Inc. is the second-largest deal of the week and plans on raising $150 million, pricing 10 million shares between $14 and $16 per share.
Led by Banc of America Securities and UBS Warburg, it will trade as "AHS" on the New York Stock Exchange.
In 2000 the company had revenue of $230 million, but lost more than $3.8 million.
The remaining health-care deal is The Advisory Board Co., which provides business strategy for the healthcare industry.
The Advisory Board Co. plans to sell 5 million shares between $17 and $19 per share, raising about $90 million, through lead underwriters Credit Suisse First Boston and Deutsche Banc Alex. Brown.
Playing games
Just in time for the holiday season and for the upcoming game console battles between Sony's PlayStation, Nintendo's GameCube and Microsoft's Xbox, video game developer Bam! Entertainment Inc. is looking to raise $36 million with its offering.
One of the signs we're looking for is broadening out," Baum said. "If (the broadening) sticks then it's an indication that it's ratcheted up a level, but if it's all restricted to health care that is an indication that the IPO market is still very defensive.
"Bam! isn't such a big surprise given what's going on with competing gamebox companies," he said.
Led by Jefferies & Co. and Morgan Keegan & Co., Bam! plans to price 4 million shares at $8-to-$10 per share. It will trade as "BFUN" on the Nasdaq.
The company had revenue of $17 million in fiscal 2001 and lost $575,000. 
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