Health Service Firm Sims to Sell Stock in Web Spinoff
An Irvine-based company with a market value of less than $20 million hopes to spin off one of its divisions in a public stock offering to raise as much as $100 million.
Sims Communications Inc., a provider of services for processing transactions for the health care industry, said Thursday that JustMed.com, a subsidiary that operates a health care Web site, will offer an undisclosed number of shares in an initial public offering.
“We want to be the one-stop medical site for products, services and information,” said Mark E. Bennett, Sims president and chief executive.
Citing regulations by the Securities Exchange Commission, the company refused to say how many shares would be offered or whether it had retained an underwriter. Sims said it plans to file a prospectus on the offering with the SEC.
The JustMed site, which started July 1, targets medical professionals and the general public. It contains scores of health articles, medical news and an online store that sells medical books and home medical equipment, including wheelchairs, syringes and crutches. In addition, the site has links to many other medical sites.
JustMed earns money through the sale of online advertising and through its affiliate relationships. The company sells other firms’ products at its site, receiving a percentage of every sale, Bennett said.
Internet heavyweight eBay currently advertises on the site.
Bennett, who is likely to head the firm, said money raised by JustMed would go toward “development and marketing and to expand the Web site.” He declined to elaborate. Bennett would not divulge JustMed’s revenue to date.
Sims posted a net loss of $1.5 million, or 13 cents a share, for the third fiscal quarter ended March 31, versus a net loss of $1.6 million, or 28 cents a share, for the same period a year earlier. Revenue for the quarter hit $512,568 from $217,882.
The company’s stock has lost more than 55% of its value in the past 12 months.
Sims plans to change its corporate name to MedCom USA to reflect its heightened focus on the health care market. The company’s stock closed Thursday at $1.06, up 9 cents a share.
