IPO Roundup: Virage surges, Accord and CareScience flop
Virage Inc. (Nasdaq: VRGE), a maker of software for video distribution over the Internet, closed up 5 7/8 to 16 7/8 in its initial public offering.
It priced 3.5 million shares at $11.
Shares were up 66 percent near midday. Virage shares priced in the middle of their $10 to $12 range for the deal, which was postponed from late April due to market conditions.
The young company introduced its first video software products in December 1997, and application services, named Virage Interactive, in May 1999. As of March 3, it has racked up $32.3 million in debt. For the fiscal year ended March 31, the company had a net loss of $18.4 million on revenue of $5.6 million, compared to a loss of $6.2 million on revenue of $ 3,350 for the same period in 1999.
Virage also relies on a a limited number of customers -- for fiscal 2000, Telecinco accounted for 13 percent and Oracle (Nasdaq: ORCL) accounted for 10 percent ot revenue. Several U.S. government agencies accounted for 12 percent of revenues.
The company also relies on Exodus Communications (Nasdaq: EXDS), which holds all the company's hardware operations in its facility in Santa Clara, California.
Virage named direct competitors as Excalibur Technologies (Nasdaq: EXCA) and MediaSite. In May 2000, Intel (Nasdaq: INTC) and Excalibur announced a relationship to form a new entity that will focus on providing Internet video infrastructure.
Credit Suisse First Boston is the deal's lead underwriter. FleetBoston Robertson Stephens and Wit SoundView are acting as co-managers.
The healthcare efficiency e-software firm had planned to price shares in the projected range of $15 to $17 each, and also lowered the number of shares it plans to sell to 4 million shares from 4.5 million shares.
The company, which provides Internet-based tools to improve the quality and efficiency of healthcare, has accumulated a deficit of $17 million as of March 31. For the year ended December 31, CareScience lost $3.6 million on revenue of $4.4 million, as opposed to a loss of $4.6 million on revenue of $2.5 million in 1998.
Much of this revenue comes from a limited number of contractual relationships. During the three months ended March 31, the company generated 16 percent of our revenue from its largest customer, Providence Health System.
CareScience said each of its product lines face different competitors, although it believes it has no single competitor. For its Caducis.com product, competitors include clinical information system companies that offer data warehousing or benchmarking.. Carestand.com faces competitors such as consulting firms, technology vendors, and local efforts.
The deal, which will leave 12.7 million shares outstanding in the company, is being underwritten by Deutsche Banc Alex. Brown.
The company offered 5 million shares.
The deal, which will leave about 19.9 million shares outstanding, is being underwritten by CIBC World Markets, Dain Rauscher Wessels and U.S. Bancorp Piper Jaffray.
Accord Networks' MGC-100 system, a real-time interactive visual and voice communications system, allows users to see as many as nine other participants on a single screen. The system allows users to connect to different types of networks and transmission protocols, including broadband and narrowband, circuit-switched and packet-based networks. The company said it serves about 20 international telecommunications providers such as Deutsche Telekom AG and France Telecom , and about 130 other businesses including Microsoft Corp. (Nasdaq: MSFT) and Nortel Networks Corp. (NYSE: NT).
The company turns a profit; net income was $220,000 in the first quarter of 2000 compared to a net loss of $239,000 in the same quarter of 1999. Revenue was $8.3 million in the three months ended March 31, 2000 compared to $4.8 million in the same 1999 quarter.
The company said it faced a patent infringement lawsuit filed in November 1998 by Ezenia! Inc., formerly known as VideoServer Inc., against its U.S. subsidiary, Accord Networks Inc. Accord Networks said it may have to relinquish some portions of the technology it currently uses if a ruling favors the plaintiff.
Reuters contributed to this report.
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