IPO Watch: Beware the Ides, and all the rest, of March

Ann C. Logue | Apr 08, 2008 6:20am EDT | 1 Comment

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We have a week with no IPOs on the calendar. China Resources Ltd., a SPAC, is listed as pricing during the week of March 31, but was originally supposed to price in February. Because more deals have been pulled than priced this month, let's examine which companies walked away from the public markets — at least for the time being.

MonoSol Rx (www.monosolrx.com, IPO withdrawn March 27)

MonoSol Rx develops thin-film products used for drug delivery. The finished product is similar to the different breath-freshening, cough and cold strips out on the market; in fact, MonoSol makes some of those. Unlike the breath strips, where the taste is the whole point, MonoSol’s film technology encapsulates the drug to mask the taste. This is a huge advantage for foul medications that uncooperative patients have to take by mouth. Two products in development target nausea and Alzheimer’s disease. MonoSol isn’t profitable, though. For the first six months of 2007, it lost $7.6 million on $2.2 million in revenue. The company had planned to offer 4 million shares at a price range of $16 to $18 per share through Cowen & Company.

LifeWatch (www.lifewatchinc.com, IPO withdrawn March 21)

LifeWatch is profitable, but that’s not enough to generate interest these days. The company provides remote cardiac monitoring services. A doctor instructs a patient to wear a monitor to detect cardiac arrhythmias. The data are transmitted via phone to LifeWatch’s call centers, which collect the information to report back to the physician. If a major problem is detected, a LifeWatch rep will call the patient and tell him or her to get medical care. The company is owned by Card Guard AG, a manufacturer of medical monitoring devices that wasn’t planning to sell shares on the offering. Proceeds had been earmarked for debt repayment, and the underwriters were Cowen & Company, Jefferies & Company and Piper Jaffray Companies (NYSE:PJC).

Vision-Ease Lens (www.vision-ease.com, IPO withdrawn March 19)

Vision-Ease Lens Corporation makes ophthalmic lenses for use in prescription eyeglasses. The company was founded in 1930, but like a lot of old-line businesses, it bounced from owner to owner until finally being taken over by a private equity firm, Insight Equity A.P., in 2004. It was profitable in 2006 but had a history of losses prior to that. J.P. Morgan had signed on to be the lead underwriter of the deal, and it’s possible that the firm’s other distractions (e.g., The Bear Stearns Companies Inc. (NYSE:BSC)) made this too much trouble to get done in a troublesome market.

Renewable Energy Group (www.regfuel.com, IPO withdrawn March 17)

Renewable Energy Group is the largest operator, marketer, and distributor of biodiesel in the United States. Would you believe that it’s based in Iowa? Yep. But Iowa will be with one fewer public company, because Credit Suisse and its underwriting partners could not get this deal done. Renewable Energy has good revenue, of $210.9 million for 2006. It’s been mostly profitable, although it was slammed by feedstock price increases in 2007, and that wasn’t enough to offset the charm or the opportunity of alternative fuels.

View Sonic (www.viewsonic.com, IPO withdrawn March 3)

View Sonic makes LCD monitors, LCD TVs, projectors and similar products. Chances are good that it made the screen you are looking at right now, because many of its products are sold under other brand names. The company was founded in 1987, but it picked the wrong year to go public. The company generated $1.2 billion in revenue and $8.2 million in net income for the nine months ending Sept. 30, 2007. But its profit history wasn’t smooth, and only perfect companies can go public now. J.P. Morgan and Banc of America were the underwriters.