The IPO Board

[badknees29]

Virtual Radiologic IPO opens after pricing at mid-range; provides remote interpretation of medical imaging (19.40 +2.40) Virtual Radiologic (VRAD), which provides remote interpretation of medical imaging, opens at $19.00 after pricing its IPO at $17, in the middle of its expected $16-18 range. The co is the second largest provider of remote diagnostic image interpretation, or teleradiology, in the US. Its serves its customers (radiology practices, hospitals, clinics by providing diagnostic image interpretations, or reads, 24 hours a day, seven days a week, 365 days a year by American Board of Radiology-certified radiologists. Its model allows its radiologists with the flexibility to choose where they work, and allows VRAD to serve customers throughout the country. VRAD operates a robust communications network using encrypted broadband internet connections and proprietary software. In recent years, the healthcare industry has experienced increasing demand for diagnostic imaging services, being driven by an aging population, advances in imaging technology and the growing availability of imaging equipment in hospitals and clinics. The shortage of radiologists and the growing imaging volume are further compounded by the need to provides services 24 hours a day. As a result, radiology practices have begun to seek supplemental services to assist their own radiology staffs with both day and night coverage. VRAD's radiologists, substantially all of whom are located in the US, are certified by the American Board of Radiology, licensed by the states in which they practice and credentialed by the hospitals for which they perform reads. Since inception, over 98% of its customer contracts up for renewal have been renewed. The co reported a small profit for the 9 mos ended Sep 30 vs a history of losses a year ago and all prior years. Revenue rose 67% yr/yr to $63.3 mln... Briefing Note: The co's main competitor is NightHawk Radiology (NHWK 19.42 -0.53), which made its IPO debut in Feb 2006 at $16. It's up 21% since then, but it has been a rocky ride for NHWK, including dropping 22% in the last month. Nevertheless, VRAD's $19.00 opening price indicates there is a good amount of interest here given its strong growth and small offering size at just 4 mln shares. This is being led by Goldman. Merrill and Wm Blair are also involved