Winning sole book-running mandates in deal-dead markets is no easy feat. For Credit Suisse First Boston, holding on recently proved to be just as tough.
In late May, HealtheTech, a Colorado-based manufacturer of medical devices, filed to go public with an IPO valued at $70 million to $80 million. The company appointed as sole book-running manager Credit Suisse First Boston, whose CEO, John Mack, was an investor. He’d acquired 150,000 HealtheTech shares between the time he left Morgan Stanley and joined CSFB. (A CSFB spokeswoman said Mack was not involved in the deal.)
In May CSFB priced the offering at $14 to $16 and set out to sell 5 million shares on a 12-day road show that would cover Europe and the U.S. and take place in early June. On June 18, however, the company refiled, lowering its price, to $11 to $13, only to notify the syndicate later that day that it would withdraw the deal because of stormy market conditions.
Enter UBS Warburg, led by überbanker Ben Lorello. On June 25 Warburg took over the role of lead manager, revised the price down even more, to $9 to $11, and embarked on a seven-day road show. Last month HealtheTech’s IPO was completed, raising $30 million in the midst of the market meltdown.
That’s far less than HealtheTech was hoping for, but it still made some investors, including Mack, a nice bit of change.
Still in its quiet period, HealtheTech declined to comment.
