Two IPOs are expected to open for trading today. Both technology-related firms priced their offerings below the proposed range.
ReachLocal (RLOC), a fast-growing provider of online marketing services for small businesses using a localized sales force, sold 4.2 million shares at $13, well below its anticipated range of $17 to $19. The $54 million in total IPO proceeds fell 28% short of the company's $75 million target. At its $13 IPO price, ReachLocal commands a fully diluted market capization of $378 million, a roughly 30% haircut to its proposed valuation. ReachLocal plans to list on the NASDAQ under the symbol RLOC. J.P. Morgan and BofA Merrill Lynch acted as lead managers on the deal.
Accretive Health (AH), which provides outsourced revenue cycle management services to US hospitals, raised $120 million on Wednesday by offering 10 million shares at $12, 20% below the midpoint of the $14 to $16 proposed range. The company had initially planned to offer 13.3 million shares. Accretive Health is expected to begin trading Thursday on the NYSE under the symbol AH. Goldman, Sachs & Co., Credit Suisse and J.P. Morgan acted as lead managers on the deal.
Today's IPOs are the only deals this week. However, with two more scheduled on the IPO calendar for next week, May could match March and April with 13 deals priced in each month.
