CORRECT: Mistras Group Opens Down Post-IPO; Recovers
08 Outubro 2009 - 5:04PM
Dow Jones News
Infrastructure safety specialist Mistras Group Inc.'s (MG)
initial public offering teetered toward stability Thursday morning
after a poor opening.
The company's stock opened at $12.30 a share on the New York
Stock Exchange, down 1.6% from its IPO price of $12.50, but then
quickly rebounded, trading recently at $12.60, up 10 cents. A total
of 8.7 million shares were sold at a price below its expected
$14-to-$16 price range.
The company focuses on assessing the safety of large
infrastructure, from nuclear power plants to food-processing
equipment. Its clients span a range of industries, from energy
companies such as BP PLC (BP, BP.LN) to engine makers like
Rolls-Royce Group PLC (RYCEY, RR.LN); it also tests the safety of
public infrastructure, such as bridges, for federal, state and
local governments.
It's a growing industry, thanks to increased outsourcing, more
refined testing procedures and the publicity surrounding major
infrastructure failures, such as the rush-hour collapse of a bridge
in Minneapolis in 2007.
Mistras plans to expand into new markets, including wind
turbines, other alternative energy, and natural gas transportation,
as well as in public infrastructure, including highways and
bridges.
The company, which ends its fiscal year May 31, has demonstrated
fast annual revenue growth, increasing 37% to $209 million in 2009.
But its operating income declined 9% due to a legal settlement with
former workers claiming California labor code violations, and an
increase in allowances for doubtful accounts after a large customer
filed for bankruptcy.
The lower operating income, combined with higher interest
expense from increased borrowing the company undertook for
acquisitions it made and equipment purchases, dragged net income
down 27% to $5.5 million compared to fiscal 2008.
Mistras estimates that revenue in its first quarter of fiscal
2010 will increase between 16% and 22% from $47 million a year
earlier, but its operating income will decline to $2 million to $3
million, compared to $3.7 million in the year-earlier period. The
company said the expected decline in operating income would occur
due to a lower-margin revenue mix as a result of the economic
downturn, a shift that is expected to continue in the near
term.
The company, of Princeton Junction, N.J., was founded by a group
of former AT&T Bell Labs researchers in 1978, and operated as
Physical Acoustics Corp. until it reorganized into Mistras in
1994.
Of the total shares sold, 2 million came from private owners and
won't benefit the company; sellers include Chairman and Chief
Executive Sotirios J. Vahaviolos; several other executives; and
private equity funds affiliated with Altus Capital Partners Inc.
and Thayer Hidden Creek.
The company plans to use its proceeds for working capital and
possible acquisitions and to pay down some debt. The debt it pays
off will also benefit its underwriters; two of them, JPMorgan Chase
& Co. (JPM) and Bank of America Corp. (BAC), are party to the
credit agreement it plans to pay off completely.
Besides JPMorgan Chase and Bank of America Merrill Lynch,
Mistras' deal was managed by Credit Suisse Group (CS).
Also expected to trade Thursday are shares of pharmaceutical
company Omeros Corp. Its stock will trade on the Nasdaq under the
symbol OMER.
- By Lynn Cowan, Dow Jones Newswires; 301-270-0323;
lynn.cowan@dowjones.com