2010 is set to be the year initial public offerings return to Orange County.
After a two-year drought for local offerings, companies are showing signs of wanting to go public this year, according to investment bankers, lawyers and others.
“We’re encouraged with what we’re seeing,” said Greg Presson, a senior managing director at the Newport Beach office of Los Angeles-based investment bank B. Riley & Co. “The market is still building confidence.”
Healthcare companies, which have held up relatively well during the downturn, are expected to lead a comeback for local public offerings.
Last month, the parent of Santa Ana-based dental services company Bright Now Dental Inc. filed plans to go public and raise up to $144 million (see story, page 1).
The offering could be the first since late 2007, when Mission Viejo-based nursing home operator Ensign Group Inc. went public, raising $64 million.
One other local company has filed to go public in a small, low-profile offering: Santa Ana’s WeCosign Inc. Shareholders are looking to sell 3.7 million shares, according to a December filing. WeCosign, which cosigns for apartment renters, isn’t raising any money in the offering and is seeking to list its shares on the low-profile Bulletin Board exchange.
Other Prospects
Other local health companies are possible candidates.
San Juan Capistrano-based Silverado Senior Living Inc., which runs facilities that care for people with Alzheimer’s disease and other forms of dementia, has said it is “substantially IPO ready” if and when its directors elect to pursue an offering.
Silverado’s compliant with Sarbanes-Oxley rules and has undergone external audits since its inception in 1996, Chief Executive Loren Shook said.
Silverado is backed by private equity firm Riordan, Lewis & Haden Inc., which has offices in Irvine and Los Angeles.
B. Riley’s Presson said he knows of two healthcare companies that are considering going public as well as a transportation company. He declined to name them.
Several technology companies are said to be considering going public but few are actively pursuing op-tions, according to sources.
Some companies tied to the Internet and mobile phone markets could be the first tech companies to make the leap, said Shiv Grewal, senior corporate partner at Newport Beach-based law firm Stradling Yocca Carlson & Rauth.
With the down market of the past two years, most tech companies “opted for buyouts,” Grewal said.
Two tech hopefuls—Irvine chipmaker WiSpry Inc. and Aliso Viejo’s UST Global Inc.—have chosen to wait it out.
“An IPO is so market-dependent,” said Russell Garcia, chief executive at WiSpry, which makes chips for cell phones. “All your metrics can be just right, but if the market isn’t ready, it doesn’t matter.”
The company makes moving microscopic machines that are thousandths of an inch in size and puts them on chips. The chips make a phone’s signal to cell towers more efficient and allow for fewer dropped calls and longer battery life.
WiSpry had been eyeing a 2010 public offering. But, like others, it didn’t meet revenue goals for 2009.
“There certainly won’t be an IPO in 2010 at the size we are at,” Garcia said. “We are looking at 2011 and 2012.”
WiSpry has raised more than $20 million in venture funding.
Aliso Viejo’s UST Global, which does custom software, project management consulting and outsourcing for others, was shooting for a 2010 public offering.
During the past year or so it’s been hiring executives and worked on implementing compliance and corporate governance processes, according to a spokeswoman.
UST Chief Executive Sajan Pillai said the company is still “optimistic about its plan to file for an initial public offering.”
But it appears to be holding off for now.
“The timing of such an event would depend on the market conditions and improvement in the global economic situation,” he said.
Vizio?
There is one other local tech offering hopeful—and a big one at that—but not for a few years out.
William Wang, founder and chief executive at Irvine’s Vizio Inc., recently told Dow Jones Newswires that he’s aiming for an offering “within five years.”
Vizio designs and markets flat TVs. It saw about $2.5 billion in revenue last year and expects that number to climb to nearly $3 billion this year (see story, page 4).
What’s likely to be the biggest public offering the county’s seen in years is expected in 2010 from Santa Ana-based First American Corp., which is spinning off its title insurance business.
It’s been a long time coming—the move was first announced in early 2008. The real estate downturn and Wall Street’s meltdown later that year delayed the spinoff.
Company officials hope for the deal to be done as soon as April (see story, page 3).
With First American now at a market value of about $3.1 billion, the deal could give OC two companies with billion-dollar valuations when all is said and done. The company values its title insurance business at about $2.3 billion.
The spinoff’s being done largely to help First American’s shareholders get more value.
Officials believe that Wall Street undervalues the other side of First American’s business of providing real estate-related data. It makes up about a third of First American’s $6 billion in annual revenue and is growing faster than the company’s title business.
The data business is set to remain under the current company’s operation with a new name and New York Stock Exchange ticker.
The spinoff is set to be called First American Financial Corp. and keep First American’s “FAF” New York Stock Exchange ticker.
Managing Editor Julie Leupold, staff reporters Dan Beighley, Sarah Tolkoff, Mark Mueller, Vita Reed and Michael Volpe and editorial assistant Carina Calhoun contributed to this article.
