Virtual Radiologic and the Xbox factor

Virtual Radiologic’s (Nasdaq: VRAD) IPO is having a good day, with a 12% increase to $19.18. 

Then again, the company is addressing a big problem; that is, a shortage of radiologists.

As a result, Virtual Radiologic has built a digital platform that allows radiologists to perform analysis from any location.  It’s turned out to be a strong business, with revenues going from $12.9 million in 2004 to $54.1 million in 2006.

I think a critical part of the success of Virtual Radiologic is its out-of-the-box thinking.  For example, instead of building its systems for a keyboard and mouse, the company built its own input device.  In fact, it looks more like a gaming device for the Xbox.  Basically, it is customized to navigate many complex images – to allow for the best analysis but also to save time. 

Also, visit DealProfiles.com to get a backgrounder on the company.

Och-Ziff’s not-so-zippy IPO

As the saying goes on Wall Street:  “You’re only as good as your last deal.”

Well, in the case of alternative investment manager IPOs, the track record has been spotty, as seen with the offerings of Fortress Investment Group (NYSE: FIG) and Blackstone (NYSE: BX).

As a result, the IPO of Och-Ziff (NYSE: OZM) certainly faced a good amount of turbulence.  There was even talk that the IPO may not even happen.

But, today, Och-Ziff was able to raise $1.15 billion in its offering (there was also a $1.15 billion infusion from Dubai International Capital, which is a mega sovereign fund).  Actually, this deal counts as one of the largest IPOs for the year.

Och-Ziff has a global hedge fund operation, which Daniel Och founded in 1994.  He was a former super trader at Goldman Sachs (NYSE: GS), where he met some rich people.  In fact, he was able to bring along the Ziff family for support.

The investment strategy was to allow for strong risk-free returns (hey, when your rich, you want to preserve things, right?)  And, it’s worked quite well.

And, revenues have been growing.  For the first nine months of 2007, revenues were $731.8 million, up from $661.5 million in the same period a year ago.  Assets under management are about $30 billion or so.

What to do with its windfall?  Och-Ziff plans to expand its global footprint – which may involve some acquisitions.  In light of the recent instability, there are likely to be some opportunities for dealmaking.

The underwriters on the deal include Goldman Sachs and Lehman Brothers (NYSE: LEH). 

Also visit DealProfiles.com for a backgrounder on Och-Ziff.

KKR’s eye on the IPO prize

True, the IPO track record of alternative asset firms has been underwhelming, as seen with the offerings of Blackstone (NYSE: BX) and Fortress Investment Group (NYSE: FIG).  Of course, the credit crunch is making it nearly impossible to finance mega deals.

But, such things aren’t a problem for KKR.  After all, the venerable private equity firm has filed an amendment to its IPO filing.

In fact, for the first half of 2007, profits increased about 26% to $667.4 million. 

That’s fine.  But, of course, the key concern is Q3.

What’s more, in light of the upcoming holidays, the KKR offering isn’t likely to hit the markets until Q1 of next year.

Also, visit DealProfiles.com to get a backgrounder on the IPO.

IPO Talk – athenahealth’s Carl Byers

Since it’s IPO in September, athenahealth’s (Nasdaq: ATHN) shares are up a hefty 140%.  The company operates a sophisticated on-demand network that helps improve the reimbursements for physician practices.  It’s a huge market opportunity ($18 billion or so) and the company is growing at a sizzling rate.

Last week, I talked to the company’s CFO, Carl Byers.  In fact, he joined the company at its founding in 1997 (before this, he was a management consultant at Booz Allen & Hamilton).

While an IPO can be a traumatic experience for an organization, that really hasn’t been the case for athenahealth.  “Because we must meet tough regulatory requirements, the IPO process has not been a big change for the company,” said Byers.

Something else: athenahealth classified all its employees as corporate insiders. 

According to Byers:  “We want to make sure that employees have access to the information they need.  This has been a key part of our cultural DNA and success.”

Also, visit DealProfiles.com for more information on the IPO.

Visa’s IPO Card

As has been widely expected, Visa filed for an IPO.  In light of MasterCard’s (NYSE: MA) stunning performance in the public markets, it seems only natural for Visa to follow suit.

And it could rank as one of the largest IPOs in history – perhaps exceeding $10 billion.

I’ve had a chance to scan through the prospectus.  No doubt, there are pages of details on outstanding lawsuits. 

Then again, the company is a big-fat target.  For the first nine moths of 2007, revenues came to $3.7 billion and net income was $771 million. 

By far, Visa operates the largest retail electronic payments network in the world.  And with the IPO dollars, the company is likely to expand things, such as for more sophisticated business transactions.  There are also the massive opportunities in places like China.

Other takeaways on Visa:
• Leader in branded credit/debit cards in circulation
• Cards accepted in 170 countries
• VisaNet processed more than 74 billion authorization, clearing and settlement requests in the 12 months ended March 31, 2007
• More than two-thirds of Visa’s financial institution customers have been customers for longer than 10 years.

Visit DealProfiles.com to get more details on the filing.

China Nepstar: IPO investors get their drug fix

Going into this week, China Nepstar (NYSE: NPD) had a price range on its public offering at $11.50-$13.50.  Well, as is usual for Chinese IPOs, it was too low.  Yesterday China Nepstar priced its shares at $16 and so far in today’s trading, the stock is up 17%.

China Nepstar is the largest retail drugstore chain in China, with a network of 1,791 stores in 62 cities.  Yet, China Nepstar’s market share is only 0.5%.  But with its IPO, the company is likely to scoop up a variety of competitors.

China Nepstar has another important differentiation:  proprietary brands.  In other words, such things are a nice margin boost.

Over the past three years, the compound annual growth rate of revenues has been about 43.4%.  Last year, there was about $227.6 million in revenues.  And, as for the first half of this year, revenues came to $124.3 million.

The underwriters on the deal include:  Goldman Sachs (NYSE: GS) and Merrill Lynch (NYSE: MER). 

You can also find more information on the IPO at DealProfiles.com.

AirMedia: Boarding all investors

In China, the advertising market is booming.  And, so is the airline industry.

As a result, the combo is supercharging the growth of AirMedia.  You see, this company is the largest digital advertising network focused on the travel sector in China.

On Tuesday, the company came to America – for an IPO (the ticker is AMCN).  The stock spiked 39% despite the plunge in the US markets.

AirMedia operates more than 2,000 digital TV screens in airports as well as over 16,000 screens on airplanes.  And, yes, advertisers have come on board, such as China Mobile (NYSE: CHL), Hitachi, Lenovo, and Nokia (NYSE: NOK).

Revenues for the first nine months were $15.9 million, up from $6.7 million in the same period a year ago.  There was also net income of $4 million.

To get more background, you can check out DealProfiles.com.

CNinsure brokers a hot IPO

CNinsure (Nasdaq: CISG) upped its offering range twice — $11- $13 to $13-$15.  But that was still too low.  That is, the company priced its IPO at $16.  And so far in today’s trading, the stock is up 61% to $25.80.

Why all the excitement?  Well, this is a Chinese company (need I say more?)

More importantly, it’s a leader in a fast growing space:  insurance brokerage.

Of course, the macro factors are strong.  The population is getting older and richer.  Besides, insurance is fairly underpenetrated in China.

CNinsure was smart to build an extensive distribution network, which is no easy feat.  Moreover, the information technology (IT) infrastructure should scale nicely.

With the IPO proceeds, CNinsure plans to buy up some of its competitors.  In fact, the company has over 170 targets. 

In other words, CNinsure wants to keep the growth-rate supercharged.  And so far, it seems to be working.

Also, click here to check out other recent IPO activity.

Maxcom’s IPO cash call

Despite a tough market today, Maxcom Telecommunications (NYSE: MXT) pulled off a successful IPO.  The offering price came at the top of its $15.50-$17.50 price range and the shares are trading about $18.70. The company raised about $200 million.

Maxcom is a telecom services provider based in Mexico.  From 2002 to 2006, the company’s voice lines went from 125,231 to 269,598.  What’s more, the churn rate declined from 3% to 1.6% (which is always a good sign in the tough telecom space — and is an indication of strong customer service).

It also helps that Maxcom continues to innovate.  For example, there are VOIP services and even Internet Protocol Television. Then gain, the company operates its own network as well as the proverbial “last mile” premise level infrastructure (which is certainly a powerful competitive advantage).

And the growth has been fairly strong.  Last year, revenues came to $155.4 million, whereas revenues for the first half of 2007 have already reached $99.7 million.  Although, the company is still losing money.

And it looks like the growth should continue for the long-haul.  Mexico’s population is growing and so is its middle class.  More importantly, the telecom market – such as for voice, data, mobile and so on – is underserved in terms of penetration rates.

If you want to check out more info on the offering, click here.

Giant Interactive IPO will be ginormous

Giant Interactive announced the initial terms of its public offering.  The price range is $12-$14 and the firm plans to sell 57.2 million shares.  Yes, the company may raise as much as $800 million.  In fact, the market cap will be in excess of $3.3 billion.

Giant is a top operator of online games in China (and it seems like the nation is obsessed with such things).  More importantly, the company’s financials are sterling, with revenues of $90.3 million and net income of $67.3 million (for the first half of 2007).

In light of other Chinese IPOs, I suspect investors won’t have any qualms with the frothy valuation.

Also, if you want to check out other recent IPO activity, click here.