Mead Johnson Nutrition Co., the largest maker of infant formula, is among five companies seeking to raise as much as $1.13 billion by selling shares next week in the first U.S. initial public offerings in 2009.

A unit of New York-based Bristol-Myers Squibb Co., Mead Johnson expects to raise as much as $690 million in the biggest planned offering next week. Madison Square Capital, a real estate investment trust specializing in mortgage securities, is attempting to pull in as much as $230 million.
Initial public offerings are off to the slowest start this year in at least a decade as investors shun all but the safest securities amid the global recession. No company raised money in New York or London in January, data compiled by Bloomberg show.
“If raising capital is absolutely critical, those doing it now must be willing to take the risk,” said Jackie Kelley, Americas IPO leader at Ernst & Young LLP. “If they do get a good valuation, one that they’re looking for, it could spur some additional activity.”
The U.S. market for initial offerings slowed to a near-halt in mid-2008. In the first half of the year, 32 companies raised $28.6 billion -- and most of that was the $19.7 billion IPO of Visa Inc., the world’s largest payment-processing network. In the second half, five companies raised $1 billion.
Next week’s deals will “try to put some sort of footprint in the sand,” said David Menlow, who tracks the market as president of Millburn, New Jersey-based IPOFinancial.com. “This is not going to be a defining moment. Anything can trip the market up.”
Cincinnati-based O’Gara Group had a loss of $2.88 million for the nine months ended Sept. 30, compared with profit of $617,000 in the previous year’s period. Its sale is being managed by Morgan Keegan & Co. and four other firms.
Changing World Technologies Inc., a maker of renewable diesel fuel and organic fertilizers, plans to raise $47.4 million through an auction run by WR Hambrecht + Co. The $2 million capital raise planned by NIVS IntelliMedia Technology Group Inc., a maker of audio and video consumer products, rounds out the planned sales.
There hasn’t been a U.S. IPO since Grand Canyon Education Inc. raised $145 million in November. Last year, firms raised $3.29 billion in new share sales through Feb. 5, Bloomberg data show. Volatility
Stock-market volatility has increased, deterring money managers from buying stock. The VIX, or Chicago Board Options Exchange Volatility Index, climbed as high as 57.36 last month, more than double the level of January 2008. Kelley said a few successful IPOs may loosen investor purse strings.
“People out there do have money and are interested in putting it into the right companies,” Kelley said.
The sales will be closely watched by other companies waiting in the wings to raise money in the public markets. If the offerings consistently price below their expected ranges, it will be a “reaffirmation of the fear component,” IPOFinancial.com’s Menlow said.
Mead Johnson originally planned to raise $1 billion from the sale and was forced to cut the price as the market went south. The Evansville, Indiana-based company had profit of $347.5 million for the nine months ended Sept. 30. That compares with $320 million in the same period a year earlier, the company said. Net sales climbed 14 percent to $2.17 billion during the period.
“The deal is going to work,” Menlow said. However, “it won’t be the all-clear whistle for the marketplace.” The offering is being managed by Citigroup Inc. and Morgan Stanley with assistance from six other firms. The company will list on the New York Stock Exchange under the ticker MJN.
(Source: Bloomberg)