Grand Opening for O.C. Firm on Wall Street
Data Processing Resources Corp. became the latest Orange County company to bask in the hot market for technology stock offerings, as the company’s stock soared 51% Wednesday on its first day of trading.
Data Processing, an 11-year-old firm that supplies high-tech temporary workers to large companies, watched its stock climb from an offering price of $14 per share to close the day at $21.125 per share in active Nasdaq market trading.
The company sold 2.39 million shares, raising $33.5 million--not counting underwriting fees--to pay off debt and to finance plans to expand beyond Data Processing’s existing four locations.
“We really feel strongly that we need to grow the company through branch openings and acquisitions,” said Michael Piraino, chief financial officer. “We’re a strong regional player, and the goal is to expand geographically through the Western United States.”
Mary Ellen Weaver, who founded the company and continues to serve as its chief executive, sold 250,000 of her own shares in the offering, which means she pocketed $3.5 million. Those shares represented less than 10% of her holdings in the company, Piraino said.
David Connell, president of the company, also sold 11,000 shares, collecting $154,000.
Data Processing has 40 employees, and a roster of 550 temporary workers currently placed in a variety of programming, systems analysis and other technology-related positions. The company’s customers include the Walt Disney Co., Nissan Motors, Mitsubishi Motor Sales of America and Apria Healthcare Group, which is based in Fountain Valley.
Data Processing had sales of about $50 million in fiscal 1995, and sales of $34 million a year earlier, Piraino said.
The company’s stock offering, which was underwritten by a group co-managed by Montgomery Securities and Robert Baird & Co., had recently been one of the top picks of the IPO Financial Network, a Springfield, N.J.-based company.
IPO Financial had projected that Data Processing shares would rise as much as $4 on its first day of trading, but in fact the company’s stock opened at $5.75 above the official offering price, then climbed another $2 to $21.75 before settling back down at the close of the day.
“I was not disappointed,” said David Menlow, president of the IPO Financial Network. “A specialty staffing company is in a solid area, but the fact that they are providing information technology is even more attractive.”
Data Processing recently opened an office in Denver, and plans to open a location in Seattle in the upcoming months, Piraino said. But he acknowledged that Data Processing faces competition from strong rivals, including Illinois-based Alternative Resources Corp. and Florida-based Interim Services.
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Going Public
In the last seven months, five Orange County companies have opened on Wall Street with successful initial public offerings. Details on the companies and the offerings:
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Offering Closing Proceeds Company Date Market price price (millions) Oakley Inc. 8/10/95 Nasdaq $23.00 $27.12 $57 Sync Research 11/10/95 Nasdaq 20.00 44.00 78 VitalCom 2/15/96 Nasdaq 12.50 13.50 25.8 Mossimo Inc. 2/23/96 NYSE 18.00 25.00 72 Data Processing 3/6/96 Nasdaq 14.00 21.12 33.5 Resources Corp.
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Source: Times reports, Bloomberg Business News
