Rosetta Stone IPO Expects To Price Mid April

Rosetta Stone Inc (RST.N), which sells language learning products, set the terms of its planned initial public offering on Wednesday for a deal expected to price in mid-April.
The Arlington, Virginia-based company plans to sell 6.25 million shares at an estimated price of $15 to $17 per share, yielding about $100 million, according to a regulatory filing.
The setting of the terms comes as the languishing U.S. IPO market shows some signs of revival.
Last month, the $828 million IPO of pediatric nutrition maker Mead Johnson Nutrition Co (MJN.N) was the largest in nearly a year, and Chinese videogame maker Changyou.com (CYOU.O), set for pricing Wednesday, has seen strong investor demand for its $120 million IPO, according to people familiar with the deal.
Those factors probably prompted Rosetta Stone to attempt a pricing in a market that seen only two IPOs in the past seven months, an analyst said. Rosetta Stone initially filed for the IPO in September.
It gives the company a strong incentive bonus to bring out its deal," said Scott Sweet, a senior managing director with research firm IPO Boutique.
"High quality IPOs, and those that are showing excellent numbers and have a definite niche, are being looked at favorably," Sweet said.
In 2008, Rosetta Stone's revenues rose 52 percent to $209.4 million from 2007, with net income of $13.9 million.
Rosetta Stone, which provides language instruction services to individuals, companies and schools primarily through CD-ROMs, has attracted attention through an advertising campaign that has featured U.S. Olympic swimming gold medal swimmer Michael Phelps.
Another campaign shows a farmer wanting to learn Italian in an effort to woo a supermodel.
The advertising has lifted Rosetta Stone's visibility and given it an edge over its main competitor, privately-held Berlitz International, Sweet said.
Rosetta Stone will be the first language instruction company to be publicly listed if its IPO prices.
Half of the shares being offered in the Rosetta Stone IPO will be sold by current shareholders.
The IPO's underwriters, led by Morgan Stanley (MS.N) and William Blair & Co, will have the right to purchase up to an additional 937,500 shares of common stock to cover over-allotments.