PECO II Offers 5,000,000 Shares in IPO
PECO II Inc. (Galion, OH), a power products supplier to the communications industry, is offering 5,000,000 of its common shares. The offering represents the company's initial public offering, because no public market currently exists for PECO II Inc. The common shares have been approved for quotation on the Nasdaq National Market and the initial public offering price is expected to be somewhere between $14 to $16 per share, according to PECO II. Common shares to be outstanding after the offering is 19,837,850 shares.PECO II has nearly doubled its net sales from $48.3 million in 1997 to $92.0 million in 1999, and achieved $74.2 million in net sales in the six months ending on June 30, 2000. Operation income increased from $5.8 million in 1997 to $10.5 million in 1999, and income from operations for the six months ending on June 30, 2000, was $8.3 million.According to PECO II, their objective is to capitalize on the rapid growth in the global market for communications power equipment by increasing market share and expanding services and products. A few key elements of the strategy include building a network of regional centers and expanding the systems integration business.The company expects to use approximately $40.4 million of the net proceeds of the offering to repay bank indebtness (approximately $13.4 million) and for capital expenditures (approximately $27.0 million), including establishing additional regional manufacturing and assembly facilities over the next two years.The company's net proceeds from the common shares in the offering will be approximately $68.6 million. According to PECO II, if the underwriters fully exercise their over-allotment option, the net proceeds from the offering will be $79.0 million.PECO II's products include components, power packages and complete turnkey power plants. PECO II began operation in 1988 and serves communication companies within the US.