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O.C. BUSINESS PLUS

Alliance Imaging Cancels Plans for IPO

Securities: Anaheim company's SEC filing says stock market conditions prompted decision.

March 28, 2001|From Bloomberg News

Alliance Imaging Inc., which has been acquired by buyout specialist Kohlberg Kravis Roberts & Co., withdrew plans to take its diagnostic imaging business public, according to regulatory documents filed Tuesday.

Anaheim-based Alliance Imaging last month filed for an initial public offering to raise as much as $173 million. The company also had planned to offer $150 million of senior subordinated notes.

Proceeds from the IPO were to help repay a $260-million line of credit with KKR, which bought Alliance in a $980-million transaction in 1999.

The company pulled its IPO registration statement with the Securities and Exchange Commission because of "uncertain market conditions," according to the filing.

Company officials couldn't be reached to comment.

The IPO market has soured in the last year. The Bloomberg IPO Index of 239 newly public companies has fallen nearly 70% since reaching a high last March. In the last month since Alliance first disclosed its IPO plans at the SEC, the index has lost about 12%.

Only four companies went public in January, compared with 16 the previous January, said Tom Madden, a partner at online research firm IPO Monitor.

Alliance Imaging, which operates diagnostic testing equipment out of mobile trailer units and offices, has a core business of magnetic resonance imaging machines, or MRIs. It has customers in hospitals and other health-care providers in 43 states.

The company had tapped Deutsche Banc Alex. Brown, Salomon Smith Barney, J.P. Morgan and UBS Warburg LLC to underwrite the stock sale. The company had intended to list shares on the New York Stock Exchange.

Kohlberg Kravis took over Alliance Imaging as the imaging company was enjoying its biggest growth spurt. Its 1998 revenue had nearly tripled to $243.3 million and grew 30% to $318.1 the following year. Sales edged up 8.6% more last year to $345.3 million.

But Alliance Imaging posted losses of $43.5 million in 1999 and $2.2 million last year.

The company is so burdened by debt that its liabilities exceeded its assets by $203.8 million at the end of December, leaving shareholders with a deficit to cover, according to a document recently filed with the Securities and Exchange Commission.

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