NEW YORK-Preferred Networks Inc., a wholesaler of one-way paging airtime, last Friday expected to launch its initial public offering of 3.3 million shares of common stock at $14 to $16 each.
The new issue was to be priced late Thursday and could begin trading immediately thereafter, according to a spokesman for the equity capital markets desk at PaineWebber Inc., New York, lead underwriter in the offering.
At the end of 1995, Preferred Networks, which is based in Norcross, Ga., had more than 240 customers, including four of the five largest paging services providers in the United States, according to the company’s preliminary offering statement. Its customers resold paging services on its networks to more than 153,000 subscribers.
Additionally, Preferred Networks is pursuing a strategy of acquiring paging network assets and licenses on other bands-150 MHz, 450 MHz and 900 MHz-from existing operators, freeing them to focus on subscriber sales and marketing. To date, it has completed 14 such purchases, eight of which were on frequencies other than 157.740 MHz.
Preferred Networks owns or has pending licenses to use the high-power 157.740 MHz paging frequency in the 50 largest U.S. metropolitan markets and their surrounding areas. This non-exclusive, private carrier paging frequency has been used historically for small paging networks that serve local customers like hospitals and small businesses.
The company has built and operates technical control centers in Atlanta and Washington, D.C., that support its paging networks in the Southeast and Mid-Atlantic regions, including seven of the 50 largest U.S. markets. Other technical control centers are under construction in Chicago and Poughkeepsie, N.Y., to serve the Midwest and Northeast. To complete its nationwide expansion, the company plans within two years to build six additional centers, in Dallas, Denver, Detroit, Los Angeles, San Francisco and Seattle.
Assuming a share price of $15 on its IPO, Preferred Networks anticipates netting approximately $45 million. Proceeds will be used to repay debt, finance expansion of its technical control centers, buy equipment and networks and for other corporate purposes. Within 18 months of completing its initial public offering, Preferred Networks plans to seek additional equity, debt or bank loan financing to fund its expansion.
