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Plenty of opportunities remaining - Global Secure
Corporation IPO Expected Next Week
By James. H. Smith
November 02, 2005
November 2, 2005 -- Lest anyone think the fizz has run out of the equities
market for the defense and homeland security sectors, there have been some
recent notable deals as well as others in the pipeline.
As much as anything else, activity has been spurred by the US$30.8 billion
Homeland Security Department appropriations bill signed last week by
President George Bush.
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While the spending bill gives US$933 million to the US Coast Guard to
upgrade and replace ageing ships and aircraft, there is still a lot of money
to be passed around.
Next week, Global Secure Corporation, a provider of an integrated platform
of products and services for the homeland security industry, is expected to
come to market after filing terms with the US Securities and Exchange
Commission in late October.
Global Secure is focused on the needs of the critical incident response
community, which consists of public and private sector organizations that
prepare for, respond to, and help in the recovery from, acts of terrorism,
natural disasters and other threats to public health and safety.
The company's offerings include data management; analysis and dissemination
services associated with potential biological threats; emergency messaging
and collaboration software; specialized training and emergency response
exercises; and personal safety products.
The Washington, DC-based company plans to offer 8.25 million shares,
including 695,000 to be sold by insiders.
Anticipated price range is US$8-10 per share.
Assuming the stock prices at the midpoint, Global Secure will have an
initial market capitalization of US$176 million.
Morgan Keegan and Jefferies will be the lead underwriters on the deal.
The company is expected to use net proceeds from the IPO to fund future
acquisitions and strategic partnerships; expansion of its sales and
marketing channels; development of new products; repayment of debt; and for
general corporate purposes.
Global Secure, formed in March 2003, has a limited operating history on
which its business can be evaluated.
The company has incurred operating losses since inception and may continue
to incur losses for the foreseeable future.
Global Secure derives a substantial portion of its revenue from government
contracts. Many of its government customers are subject to stringent
budgetary constraints and political considerations.
However, the company does not operate in the defense hardware sector that is
expected to be hit hard when the new US budget is approved.
A look through recently postponed and withdrawn IPO’s provides an
interesting glimpse into the homeland security and defense sectors; not one
of the postponed or withdrawn deals involved a company in either sector.
On 1 November, On Track Innovations Ltd, which provides contactless
microprocessor-based smart card solutions for homeland security, payments,
petroleum payments and other applications, announced that it has completed
an approximately US$22.2 million private placement of new equity financing
with institutional investors from the US, Switzerland and England.
The company intends to use net proceeds from the placement to support
large-scale implementation of projects in the ID and payments markets.
RBC Capital Markets acted as lead placement agent and Andrew Garrett, Inc
acted as co-placement agent for the offering.
The transaction involved the sale of 1.8 million units at US$12.15 per unit.
Disclaimer
James Smith is an independent columnist for this web site. James Smith may
hold long or short positions in any of the stocks mentioned in this article
and those positions can change at any moment.
InvestorIdeas.com Disclaimer:
www.InvestorIdeas.com/About/Disclaimer.asp, InvestorIdeas is not
affiliated or compensated by the companies mentioned in this article. James
Smith is a freelance writer. Nothing in the articles should be construed as
an offer or solicitation or recommendation to buy or sell any specific
products or securities. Past performance does not guarantee future results.
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