THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Wednesday, January 8, 1997 TAG: 9701080334
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: 53 lines
Metro Information Services Inc., a computer-services provider that plans to go public late this month, said in a filing this week that it expects to clear at least $27 million from the stock offering.
In addition, the company said its founder and president, John H. Fain, plans to sell a block of his stock - a transaction that could net Fain more than $10 million.
The 18-year-old Metro, which has become one of Hampton Roads' fastest-growing companies, first indicated in November that it planned an initial public offering. Its latest filing with the Securities and Exchange Commission fleshes out details of the offering, now scheduled for the week of Jan. 27.
The company will trade on the Nasdaq market under the symbol ``MISI.''
Fain and his fellow executives are hoping to capitalize on surging market values for companies like Metro that supply computer-consulting services to Corporate America.
If the company achieves a targeted $13-a-share initial offering price for its shares, Metro stock will have a total market value of about $190 million - roughly twice its revenues for 1996.
Fain will own about 46 percent of Metro's 14.8 million shares of stock after the offering - which at $13 a share would have a total market value of about $88 million. Another 1.6 million shares, or 11 percent, will be held by a Fain family trust or other family members. At the $13 initial target, they'd be worth a total of about $21 million.
Other key Metro shareholders and the projected value of their post-offering shares include Andrew J. Downing, executive vice president and chief operating officer, 4.6 percent, $8.8 million; and Janet A. Ellis, head of Metro's Hampton Roads division, 4.5 percent, $8.7 million.
Metro said in its latest filing that it plans to use $15 million of its $27 million in expected proceeds from the offering to eliminate all company debt. It said it will use the remaining money for potential acquisitions of other companies, to upgrade technology and to open new offices. Currently, Metro's 1,500 employees are spread across 24 offices in the United States and Puerto Rico. The newest office, opened this month, is in Denver.
To comply with Nasdaq rules, the company said it will add two outside directors to its board. Currently, Fain is the sole director.
However, Metro said it will stagger the expiration dates of its directors' terms to discourage potential hostile acquirers from seeking to unseat board members.
Metro said its board will also be authorized to issue a new class of preferred stock - another action that is often used to discourage takeover efforts.
The underwriters of the planned offering are Robert W. Baird & Co., Milwaukee; J.C. Bradford & Co., Nashville, Tenn.; and Robinson-Humphrey Co., Atlanta.