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Technology Stocks : BACKDOOR, an IPO> IDTC,BRKT,BNYN,KLOC,NAVR -- Ignore unavailable to you. Want to Upgrade?

To: Ken Whiteside who wrote (816)	7/11/1999 11:45:00 PM
From: Glenn Petersen	Respond to of 954

Medical Advisory Systems (MEAS) owns 14.5% of AmericasDoctor.com, which has recently filed its S-1. While the deal has not yet been priced, I thought that I would post some of the details on this thread. I should first point out that MEAS, which closed at $20.80 per share on Friday, traded as low as $.50 per share nine months ago. I should also point out that MEAS has retained BancBoston Robertson Stephens to review "strategic alternatives." In other words, they are looking to sell the company. Per the company's proxy materials, MEAS had 4,716,438 shares outstanding as of May 14, 1999. This balance includes the effect from the conversion of 500,000 preferred shares into a like number of common shares on May 1, 1999. These preferred shares were sold in a private placement in February 1999 at $6 per share. Nice return. The initial filing of the AmericasDoctor.com S-1 does not price the deal but it might be useful to run some assumptions using KOOP as a comparative. When KOOP went public, it sold, including the over-allotment option, 10,781,250 shares, or approximately 37.3% of the company. There are currently 28,920,841 shares outstanding. Yahoo shows only 27.5 MM but that number does not include the over-allotment shares. The IPO came out at $9 per share, the stock eventually spiked to 45 3/4 and now sits at 29 5/16. A triple. AmerciasDoctor.com is looking to raise $60.0 MM. Given that this sector has been hot, let us assume that the $60.0 MM buys 30% of the company. That gives the company a pre-offering value of $200.0 MM. MEAS' pre-IPO interest in AmericasDoctor.com is 14.5%. Assuming that 30% of the company is sold off, MEAS will retain a post-IPO interest of 10.15%. If we assume that AmericasDoctor.com doubles from its offering price, MEAS' 10.15% would have a gross value of $40.6 MM ($400.0 MM times 10.15%). Discount the $40.6 MM by 40% to reflect tax and liquidity issues, and you are left with $24.36 MM, or $5.16 per share ($24.36 MM divided by 4,716,438 shares). Based on Friday's closing price of $20.80 per share, that would value the remainder of MEAS at $15.64 per share. That seems a bit pricey and probably explains why the company is looking to be acquired. HLTH sold only 7.25% of their company when they went public, but they only raised $45.0 MM and severely underestimated the demand for their stock. They did have, however, an annualized sales run rate of $44.3 MM when they went public. For the quarter ending March 31, 1999, AmericasDoctor.com had sales of $216,000. For the same quarter, KOOP had sales of $404,000. I do not find this to be a very attractive "back door" play. JMHO. The MEAS proxy materials can be found at: sec.gov The AmericasDoctor.com S-1 can be found at: sec.gov.