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Vera Bradley set to go public

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Vera Bradley Inc. is set to make its debut as a publicly traded company.

The Fort Wayne-based handbag maker’s initial public offering is expected to be priced by Wednesday morning, positioning company shares to begin trading on NASDAQ under the symbol VRA.

Vera Bradley raised about $165 million by offering 11 million shares—7 million currently held by insiders and another 4 million new shares. The estimated offering price is $14 to $16 each.

But Morningstar analyst Pete Wahlstrom predicts the IPO could bring $18 a share because of higher-than-expected interest. That would push the total value of the IPO to $198 million.

It is the first Indiana-based company to go public since Carmel-based used-vehicle auctioneer KAR Auction Services Inc. raised $300 million in December.

Two more Indiana companies are set to follow Vera Bradley.

Evansville-based UCI International, a supplier of replacement parts for the light- and heavy-duty vehicle aftermarket, said in July it plans to raise $200 million. And biopharmaceutical company Endocyte Inc. filed its IPO in August.

Endocyte, headquartered at Purdue University Park in West Lafayette, has yet to determine the number of shares to be offered and their price range.

Having three IPOs filed so far this year is quite a turnaround from recent years. Only two were filed in 2009. Besides KAR, Evansville-based infant-formula-maker Mead Johnson Nutrition Co. staged a $782 million IPO in February 2009, but then promptly moved its headquarters to the Chicago area.

If both UCI International and Endocyte also go public this year, the three completed IPOs would equal 2007’s output. No more than three companies in Indiana have gone public since five did in 2004.

“It’s been a horrible IPO market for quite awhile,” said David Millard, chairman of the business department at locally based law firm Barnes & Thornburg LLP. “This is a great sign to see companies take it the rest of the way.”

Nationally, 213 companies have filed IPOs, which represents a 222-percent increase from last year—the lowest output since 2001.

Meanwhile, Patricia Miller and Barbara Bradley Baekgaard, two friends who founded Vera Bradley in 1982, are the biggest sellers of company stock.

Miller, Indiana’s former secretary of commerce, is selling 2.8 million shares in the company’s IPO, likely generating a windfall of at least $39 million. Baekgaard is selling 2.2 million shares, likely generating at least $30.8 million.

Both founders will remain big shareholders. Together with her husband, P. Michael Miller, Patricia Miller would own more than 10 million shares representing a quarter of the company. Baekgaard would own 11 million shares representing nearly 30 percent of the company.

The pair no longer lead the business but remain on the board. Miller, 72, serves as the company’s national spokeswoman, and Baekgaard, 71, serves as chief creative officer.

The company sells online as well as through 3,300 independent retailers and 28 of its own full-price stores.

The first full-price store opened just three years ago. Vera Bradley says in its SEC filing that it believes the United States can support more than 300 of the stores.

Vera Bradley reported profit in its latest fiscal year of $43.2 million on $288.9 million in revenue.
 

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  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

  3. I don't know about the rest of you but I only stop at these places for one reason, and it's not to picnic. I move trucks for dealers and have been to rest areas in most all 48 lower states. Some of ours need upgrading no doubt. Many states rest areas are much worse than ours. In the rest area on I-70 just past Richmond truckers have to hike about a quarter of a mile. When I stop I;m generally in a bit of a hurry. Convenience,not beauty, is a primary concern.

  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.

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