CurrentOfferings.com Story:

Mixed day in IPO land

By Brenon Daly, The Deal, June 30, 2004

On the final � and busy � day of the second quarter, two companies had strong IPO debuts Wednesday, June 29, another three laid out terms on their expected offerings and one backed off immediate plans to hit the public market.

"For a lot of the quarter, the activity wasn't that great. But we're certainly ending with a bang," said Tom Taulli of Current Offerings Inc. "It's kind of like [sales at] a software company, where they stuff the channel before the end of the quarter."

After pricing its 9.9 million-share offering at $18.50 per share, Life Time Fitness saw its freshly issued shares change hands at $20.89 in afternoon trading. Credit Suisse First Boston and Merrill Lynch & Co. served as co-managers for the offering of the Eden Prairie, Minn.-based gym operator.

Life Time Fitness' main owners are Minneapolis-based Norwest Equity Partners, which held nearly 10.5 million shares before the offering, and Apax Managers Inc., with 4 million shares.

Shares in the other IPO of the day, San Francisco-based furniture retailer Design Within Reach, jumped even higher. The 4.1 million-share offering, led by CIBC World Markets Corp., priced at $12 a share but rose to $16.58 each in afternoon trading.

San Francisco-based private equity firm JH Capital Partners and its affiliates owned about half of Design Within Reach ahead of the offering.

The first-day performance by both Life Time Fitness and Design Within Reach extends the strong debuts seen recently at Blue Nile Inc., Cabela's Inc. and Eyetech Pharmaceuticals Inc.

"Investors want to participate in IPOs ... so if you have a quality offering, they're ready to come back to the market," Taulli said.

That wasn't the case for Worldspan Technologies Inc., at least for now. The Atlanta-based company, which supplies technology to the travel industry, postponed its offering of 32.3 million shares, three weeks after pricing it at $19 to $21 each. Citigroup Venture Capital Equity Partners LP and the Ontario Teachers' Pension Plan Board are the principal shareholders of Worldspan.

The company didn't return a call, and efforts to reach the co-managers of the offering, Lehman Brothers Inc. and J.P. Morgan Chase & Co., weren't immediately successful.

Separately, three companies set the terms for their expected IPOs.

Education services company Educate Inc. plans to sell 15 million shares at $14 to $16 each; loan company Collegiate Funding Services plans to offer 9.4 million shares at $15 to $17 each; and technology company Lumera Corp. bumped up the size of its offering to 6 million shares, from 5 million, and the price to $6.50 to $7.50 each, from $5 to $6 each.

Those offerings may be pressured by both the beginning of Wall Street's annual summer vacation season as well as Google Inc.'s expected IPO in the next month or so, Taulli said.

"They'll want to stay out of the way of Google," he said of the smaller companies in the IPO pipeline. "It's like in Hollywood � you don't even think about opening the same week as 'Spider-Man 2.' "