STREETWISE: Bacou SA calls on Bacou USA

The float of Bacou USA Inc. could be getting even thinner over the next few weeks.

Sources familiar with the Smithfield, R.I., manufacturer of occupational safety products say the company’s majority shareholder is maneuvering to take Bacou private.

France’s Bacou SA, which owns about 75% of the 17 million outstanding shares of Bacou USA, is said to be leading the effort to take the company out of the public market.

The company went public in July 1998. Since the start of this year, the stock has gained nearly 75%. It is trading at an all-time high of about $26 and has a price-earnings ratio of 15.

The company filed an 8-K report with the Securities and Exchange Commission in July, disclosing that it was for sale. Deutsche Bank was hired as an adviser.

According to sources, the company plans to delay its third-quarter earnings report, originally scheduled for Oct. 12, until some time after Oct. 20. Many believe that this decision has more to do with news about the company’s public status than it does a problem with earnings.

Analysts regard Bacou, which earned $27.5 million, or $1.56 per share, in fiscal 1999 on $273 million in revenues, as a well-managed company with solid cash-generation capabilities.

Philip Barr, president and CEO, refused to comment on a potential sale beyond saying, “It’s a process, and it’s ongoing.”

non-stop gains

Logic would dictate that a stock like BEA Systems Inc. should be poised for a quick rush of profit taking just about now. The stock, up 125% so far this year and trading at an all-time high of $80, has been charging through analysts’ price targets ever since it found bottom at $25.50 in April.

A closer look, however, shows a company that is getting deeper into its business lines in sync with the ascent of the stock price.

Based in San Jose, Calif., BEA Systems is the leading provider of e-commerce transaction software. The company’s market share is estimated to be at least 32%, and it could be as high as 65%, depending on where the numbers are coming from. International Business Machines Corp. is a distant second with about 16% of the market.

Five years after its founding by Bill Coleman, Ed Scott and Alfred Chuang (the B, E and A in its name), BEA Systems is fully ensconced in a growth mode that includes first building distribution and account presence, and then putting the new products in place.

According to Kevin Faulkner, BEA’s investor relations director, the growth strategy is heavily dependent on acquisitions. The company acquired four companies last year, and Mr. Faulkner says there will likely be four more acquisitions by the end of the current fiscal year Jan. 31.

“We’re trying to arrange things so that we are a dominant player,” he says.

By most counts, BEA is right on track.

“We believe that BEA is in a unique position to be a gorilla vendor in the web application market,” says Marshall Senk, an analyst with BancBoston Robertson Stephens.