Steri-Oss, Maker of Dental Implants, Plans Stock Sale

YORBA LINDA —  Dental implant maker Steri-Oss Inc. plans to raise about $65 million in an initial public stock offering to pay off debt that financed its spinoff less than a year ago from giant Bausch & Lomb.

The fast-growing Yorba Linda company issued debt and preferred stock worth nearly $75 million last November to finance a buyout by management and a private investment fund.

The company plans to offer 4.7 million shares of common stock, priced at $14 to $16 a share, according to documents filed Tuesday with the Securities and Exchange Commission.

Proceeds would be used to redeem outstanding preferred stock, to pay debt and for other, general uses. The offering is expected to boost the value of stockholders’ equity from a negative $1.1 million to a positive $77.6 million.

New public investors would end up owning a 43% stake. Existing stockholders, whose investment is valued at an average price of $3.21 a share, would hold a 57% stake. Steri-Oss, which has 232 employees, develops, makes and markets a line of titanium implants for missing teeth. An implant consists of a prosthesis that resembles a sawed-down tooth and a tiny screw that attaches it to the jawbone.

The company boosted its sales significantly when it purchased the dental business of Interpore International last May, according to the SEC filing. The two operations last year sold more implants than any competitor.

Steri-Oss sales jumped 22.8% for the six months ended June 30, to $19.3 million from $15.7 million for the comparable period a year ago. However, the company lost $2.4 million during the recent period, contrasted with income of $1 million a year ago. The loss stemmed largely from increased interest expense and amortization of goodwill associated with the spinoff.

Founded in 1985, the company was sold to Bausch & Lomb four years ago when the Rochester, N.Y., corporation was attempting to diversify into dental products. Last year, Bausch & Lomb, changing direction, decided to refocus on its basic vision business and divest itself of Steri-Oss.

The company will seek listing of its stock on the Nasdaq National Market under the symbol STRI.

Underwriters for the offering are Donaldson, Lufkin & Jenrette, UBS Securities and Furman Selz.