Recent County Offerings Find it Tough-Going in Public
By RAJIV VYAS
There’s not much middle ground among the 13 Orange County companies with initial public offerings since 2000,their stock prices either have done well or poorly.
Just three companies,Edwards Lifesciences Corp., Sybron Dental Spec-ialties Inc. and Resources Connec-tion Inc.,have seen their stocks post gains since their opening days. That’s according to the Business Journal’s list of stock offerings since January 2000, ranked by the amount raised in the offering.
“The performance hasn’t been very good for most companies,” said Dennis McCarthy, managing director at Los Angeles-based investment bank The Seidler Cos., which has an Irvine office.
Collectively, shares of the 13 companies fell 28% since their debuts.
The decline isn’t just an OC phenomenon,most new public companies have seen their stock prices fall from their first day of trading as the market in general has taken a beating during the past few years. The Standard & Poor’s 500 index is down 22% since January 2000 while the Dow Jones Industrial Average is off 7%.
The best OC performer: Resources Connection. The Costa Mesa-based provider of financial, human resources and other services to large companies, has seen its stock rise 59% since its first-day closing price in December 2000.
That edged Orange-based Sybron Dental Specialties, which posted a 58% gain, while Irvine’s Edwards Lifesciences was the only other gainer, with a healthy 44% rise. Sybron and Edwards are among a handful of healthcare and drug companies on the list, though the others didn’t fare as well.
The top two money raisers on the list,Edwards and Sybron,were both spinoffs.
Medical device maker Edwards was spun off from parent Baxter International Inc., generating $812 million for its shareholders, who were owners of stock in the parent company.
Sybron debuted on the public markets in November 2000, raising $540 million for its shareholders. The maker of materials and instruments for dentists, orthodontists and laboratories was a spinoff from what is now Apogent Technologies Inc. in Portsmouth, N.H.
Sybron’s units include Kerr Dental, a maker of restorative dental materials and instruments used in root canal therapy; Ormco, which produces orthodontic supplies like braces, bands, crowns and elastics; and Metrex Research, a maker of infection-control products.
Both Edwards and Sybron reflect healthcare’s emergence as a relatively safe haven for investors wary of the Internet fallout.
“The healthcare, or broadly, the medical space has been the shining star for the past year,” McCarthy said. “Most medical companies have done well so it’s not surprising that if companies were in this space and were priced reasonably well, they would have had some upside.”
Poor Offerings
But for every OC offering whose stock rose, there were three that didn’t do well. Ten of the 13 OC companies on the list have seen their stock prices fall from their first-day close, declining 54% as a group.
Two of them,Buy.com Inc. and eMachines Inc.,had to be taken private because their shares fell through the floor less than two years after each went public.
Aliso Viejo-based Buy.com came out with a public offering in February 2000 with a share price of 13. But with mounting losses and the dot-com meltdown, the online retailer saw its share price plunge below a dollar for much of its remaining time as a public company.
Irvine-based eMachines had a similar decline in its stock. That led to a management buyout in late 2001.
One of the worst performing public offerings was Ista Pharmaceuticals Inc. The Irvine-based drug developer raised $32 million at its public debut in August 2000, but has a market value of just $15 million at its recent trading price of 88 cents a share. The company’s stock has fallen 92% since its public offering.
The past two years have been extremely lean for public offerings.
Anaheim-based Alliance Imaging Inc. was the sole offering last year, raising $122 million. Shares of the company have fallen 3% since opening day, a relatively decent performance given the results at other companies.
Costa Mesa-based Ribapharm Inc. is this year’s only debut. Ribapharm, which makes antiviral and anticancer drugs, is a spinoff of ICN Pharmaceuticals Inc. It raised $260 million in April and has seen its shares trade in a narrow range, down 1% since the offering.
