Panavision Looks Like A Solid IPO, Analysts Say >PVI 11/21/1996 Dow Jones News Service (Copyright (c) 1996, Dow Jones & Company, Inc.)
NEW YORK (Dow Jones)--Investors like Panavision Inc.'s (PVI) initial public offering - and there's more to the deal than Hollywood glitz.
The company, based in Woodland Hills, Calif., designs and manufacturers high-precision film cameras for the movie and television industries.
'Panavision pretty much has a lock on the market,' said Ryan Jacob, research director for IPO Value Monitor. 'They're in a situation right now where demand exceeds what they can deliver, and that's been the case since 1993.'
The company priced 3.5 million shares at $17 each through underwriters led by Goldman Sachs & Co. Price talk was $16 to $18. The stock opened at 19 1/2, where it now trades.
Net proceeds will be used to reduce debt, as working capital and for general corporate purposes.
Unlike some deals, where net proceeds go to a parent company or a significant portion of the money goes to a major shareholder, Panavision will use the money raised in the IPO to strengthen the company, Jacob
said.
He said the company recapitalized earlier this year and plans to boost production.
'Panavision is a solid company and we think it can put up some pretty good numbers in the next couple of years,' he said.
Steven Samblis , president of Samblis Financial Corp. in Longwood, Fla., said Panavision's name is known by the general public, the deal is backed by a top underwriter, and it is fairly priced - all of which point to
strong interest from investors.
However, Panavision's industry is narrow and the IPO won't generate the buzz in the general press created by Netscape Communications Corp. (NSCP), one of last year's hottest deals. Panavision is therefore unlikely to tweak the interest of the general investor because the company is limited to a single, well-established product line with no technological advances expected in the immediate future.
Samblis said he likes deals where most of the net proceeds are used to expand the business rather than to repay debt.
'You look for companies that need only one thing to explode in value - working capital,' he said. 'What I don't know about this company is how they'll enhance shareholder value. So, this one's on the fence. But it's a very high fence and whichever way it falls, it will be dramatic. This deal will do well - or absolutely nothing.'
(END) DOW JONES NEWS 11-21-96
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