Pump and valve maker Colfax enters unsteady IPO market

The most prominent IPO of the week, that of pump and valve manufacturer Colfax, may not be sexy, but analysts say the company's predictability is appealing in the current uncertain environment.

Colfax makes fluid-handling products, including pumps and specialty valves. It serves five core markets: commercial marine, oil and gas, power generation, global navy and general industrial.

In 2007, Colfax reported income of $64.9 million, while its revenue rose 29 percent to $506.3 million. About 66 percent of the company's 2007 sales came from outside the U.S, according to the company's prospectus.

Francis Gaskins, president of IPODesktop.com, said Colfax's appeal is based on its geographic diversity and slow but steady growth. While the market is recovering, Gaskins said, this is a solid deal for the current environment.

Colfax was formed in 1995 by a group of investors, including President and Chief Executive John Young. Since its founding, the company has built its business through 12 acquisitions.

In the company's roadshow presentation, Young said the company expects its growth to continue based on increasing international business, expanding naval fleets, surging demand for crude oil and growing energy infrastructures in developing regions around the world.

Scott Sweet, managing director of research firm IPO Boutique, noted that Colfax's competitors, Flowserve Corp. and Robbins & Myers Inc., are now trading at or near 52-week highs. The stocks of both companies have roughly doubled in price since last May.

"It's predictable, and people like that," Gaskins said.

Colfax expects to raise at least $111.3 million from its portion of the IPO. The company is selling 7.8 million shares, while a group of stockholders is offering 10.9 million shares. The selling stockholders, directors Mitchell P. Rales and Steven M. Rales, will continue to own a combined total of 44 percent of the company's stock after the IPO.