HCIA Inc., a Baltimore-based provider of information products and services to the health care industry, expects to raise at least $17.5 million by selling up to 25 percent of its shares to the public.
The initial public offering, underwritten by Alex. Brown Inc. of Baltimore and Hambrecht & Quist Inc. of San Francisco, is for 1.75 million shares to be priced at $10 to $12.
An $11 price would value the local company at about $79 million. New York-based AMBAC Inc., HCIA's main stockholder, will retain 70 percent to 73 percent of the company after the offering, with Chairman and Chief Executive George D. Pillari holding about 5 percent.
The offering is scheduled to take place today or tomorrow.
The 10-year-old company gets about 70 percent of its revenue from information services that help hospitals judge the cost-effectiveness of different therapies, help drug and medical supply companies with marketing strategy, and let insurance companies and health maintenance organizations do financial analyses of doctors and hospitals.
Neither the company nor its investment bankers would talk yesterday, citing federal securities laws that prevent them from making any public comments during the days before the offering, other than what appears in Securities and Exchange Commission filings.
In a 1993 interview, Mr. Pillari said the company's role is to help health care providers root out the "billions of dollars that are spent each year . . . due to inefficiency."
"It's not just paperwork, but physicians prescribing too much of a certain type of medicine or the patient is being kept in the hospital too long," he said.
"We want to position ourselves as a public library-type utility," added Mr. Pillari, who is now 32.
"We're not a consulting firm -- people don't hire us to make them look good."
According to HCIA's prospectus, the company's customers include Amgen Inc., a California biotechnology firm that accounts for 12 percent of HCIA's sales; 18 of the nation's 25 biggest insurance companies; 16 of the 25 biggest managed-care providers; and more than 2,000 hospitals.
The company earned $1.02 million last year, up from $212,000 in 1993. Sales last year were $30.71 million, up from $28.11 million.
HCIA employs about 330 people and also has offices in Michigan, South Carolina, California and England.