VC-backed Medidata set for June IPO

In another sign that the IPO market is on the road to recovery, two more companies—a developer of medical data management software and a Chinese water treatment equipment supplier—are set to go public on U.S. exchanges later this month.

New York-based Medidata Solutions Inc., which applied to list on the Nasdaq under the symbol “MDSO,” expects to price on June 17 and begin trading the following day.

Duoyuan Global Water Inc., which distributes water treatment equipment in 28 Chinese provinces, expects to begin trading the week of June 22 and has applied to list on the New York Stock Exchange under the ticker “DGW.”

They would follow a modest string of seven IPOs in the United States since February when a public offering by pediatrics nutrition maker Mead Johnson Nutrition Co. (NYSE: MJN) broke a nearly three-month period without any new issues.

In addition, VC-backed OpenTable and SolarWinds launched IPOs in May, and the companies performed well in their respective public market debut. OpenTable’s run-up marked the largest first-day performance for a U.S.-based venture-backed IPO in more than 18 months. OpenTable (Nasdaq: OPEN) became the first venture-backed company to go public since Rackspace Hosting (NYSE: RAX), which went public in August.

Medidata, whose clients include drugmakers Johnson & Johnson and AstraZeneca, expects to sell 6.3 million shares in a price range of between $11 and $13, netting proceeds of $64.2 million, according to a prospectus filed with the Securities and Exchange Commission.

Previously, Medidata raised nearly $22 million in venture funding between 2002 and 2004 from Insight Venture Partners, Milestone Venture Partners and Silicon Alley Venture Partners, among other investors.

Altogether, the three venture firms hold 6.9 million shares, which would be worth more than $83 million at an average price of $12 per share, according to its prospectus.

The largest shareholder is Insight Venture Partners, which holds 5.4 million shares. insight’s holdings would be worth a little more than $65 million at an average price of $12 per share.

The second largest shareholder is Milestone Venture Partners, which holds 1.2 million shares, which would be worth close to $15 million at $12 per share.

Finally, Silicon Alley Venture Partners holds just 271, 248 shares, which would be worth $3.25 million at $12 per share.

If Medidata launches its IPO as planned, it will be the third software company to go public on a U.S. exchange in 2009, after language training software maker Rosetta Stone Inc. (NYSE: RST) and SolarWinds Inc (NYSE: SWI).

Duoyuan said in a filing last week that it plans to sell 5 million American Depositary Shares for between $13 and $15 each. The supplier of water treatment equipment, which saw its sales rise 40% in 2008, is the third Chinese company to apply to go public on a U.S. exchange in 2009.

It follows video game maker Ltd. (Nasdaq: CYOU), which went public in April, and Chinese chemicals company Chemspec, which filed in late May for a $100 million IPO. The date of Chemspec’s IPO is still undetermined. —Phil Wahba, Reuters