L.A. firms drooling to get in on this year's IPO boom; new-issues market is up strongly after solid 1992.

Los Angeles investment bankers are licking their chops in anticipation of another strong year for initial public stock offerings, with many investment bankers busy preparing filings for local companies.

L.A.-area company names which may be found on IPO stock prospectuses in 1993 include: Chorus Line, a clothing manufacturer; Managed Health Network Inc.; Out-Takes Inc., a digital photography firm, and Kenfil Inc., a software distributor.

"So far, so good," said Lloyd Greif, president of Greif & Co., an L.A.-based corporate investment banking firm. "The IPO market had a banner year in 1992 and 1993 has started with a roar. Let's hope it continues this way."

According to New Jersey-based Securities Data Co., 15 companies based in L.A. County completed IPOs during 1992, for a total of $450.8 million.

Nationally, 1992 was a record year for such offerings, better than 1986, the previous record year. The total value of IPOs nationwide last year was $39.4 billion, according to Securities Data.

However, 1992 was not all smooth sailing for local companies planning initial offerings. The IPO market collapsed last May with the lull continuing until September, prompting local firms such as Packard Bell Electronics Inc. and Ralphs Grocery Co., which had completed filings, to table plans. The market recovered during the fourth quarter.

Los Angeles' strength is emerging growth companies, said Greif, who is working to bring three of them public. One is an apparel company and the other two are manufacturers. He expects the $10 million to $20 million public offerings sometime in the second or third quarter.

Michael Tennenbaum, vice chairman of investment banking with Bear, Stearns & Co. in L.A., said the activity for new stock offerings this year could be "stronger than 1992."

He cited the strong degree of excitement and investor interest for offerings from small and medium-sized companies and noted that most of the large companies in Los Angeles are already public.

Tennenbaum said Bear Stearns is "quite busy," with IPO filings in the works for 10 companies.

He predicted a large number of prospective IPOs for the second quarter.

"There is going to be a big rush at the door," he said. "But the system can only accommodate so many."

At the local office of the Securities and Exchange Commission, where companies file registration statements for offerings, Rosalind Tyson, associate regional administrator for regulation, said she is seeing a "mini-surge" in IPO filings.

"We are seeing more companies filing here in 1993 than last year at this time," she said.

With many growing companies facing a continuing credit crunch, an IPO is an attractive way for many L.A. firms to raise cash, investment bankers said.

Tom Weinberger, managing director of corporate finance for Oppenheimer & Co. in Westwood, said his office is especially busy in all areas of investment banking, including IPOs. He said the company is adding two to three bankers to handle the backlog.

"We are seeing some areas doing particularly well, including health care and electronics," said Weinberger.

One L.A.-based health care company preparing to file with the SEC is Managed Health Network Inc., an HMO specializing in mental health and drug abuse.

"We hope to do an IPO of about $20 million to $30 million by the second quarter," said Ronald Moreland, chairman and chief executive officer for Managed Health, which has 14 offices nationwide, including New York and Dallas. Moreland said his company had revenues last year of $40 million.

Another L.A. company preparing to file is Chorus Line, a garment manufacturer.

"Yes, we are in the process of doing an IPO," said Chairman Barry Sacks. He estimated the offering at $30 million.

According to information provided by Securities Data, Santa Monica-based Out-Takes, which filed with the SEC in October, is expected to complete a $5 million public offering by the end of February. Likewise, Van Nuys-based Kenfil filed with the SEC last year and was expected to complete an estimated $20 million offering last week, Securities Data said.

At the Los Angeles office of Sutro & Co., Stephen Koffler, an executive vice president and director of investment banking, said he has two local IPOs in the works.

"The IPO market is quite alive, it's hot," he said.

Michael G. McCaffery, president of San Francisco-based Robertson, Stephens & Co., said he expects many more filings this quarter and a heavy IPO backlog in the second quarter.

"We're seeing good interest from L.A.-based companies," said McCaffery. "Right now, we are expecting to go forward with four L.A.-based companies."

He said two firms are specialty retailers, one is in health care and one is a technology company.

A chief financial officer with a Pasadena-based specialty retailer, who did not

want his company's name revealed, said he was meeting with underwriters last week to prepare an SEC filing for an IPO.

"From what I understand, there is a Clinton-based euphoria toward the small-cap companies (firms with relatively low capitalization) in the U.S. right now," he said. "As long as the market is as enthusiastic about our products as we are, it looks good."

However, Chatsworth-based Packard Bell Electronics Inc., which had filed last year with the SEC for a $75 million IPO, has postponed the issue, said Fred Kern, vice president of marketing for Packard Bell.

"It's not out of the question, but we're exploring other options," he said.

Dan Levitan, a managing director and head of West Coast investment banking for Werthheim Schroder & Co. in Los Angeles, cautioned that the IPO market is "impossible to predict" for the next 12 months.

"I'm seeing a great deal of activity in terms of companies preparing to file. As long as equity markets stay strong, the short-term prospects look positive," he said.

He said IPO activity will hinge on market conditions and noted if conditions change, so could the market.

"The IPO market is driven by greed or fear," he said. "The window is shut when fear is dominant. When greed is dominant, the window is open and lots of companies rush to get through."

Greif used a similar analogy for initial public offering activity, advising companies to follow the market closely.

"I think you need to strike while the iron is hot," he said. "If the window is open, you go through the window because it can shut very quickly. The market waits for no one."