WRAPUP 4-Two IPOs rise as U.S. markets fall

* Accretive Health, ReachLocal close above IPO price

* Accretive Health IPO raised 40 pct less than anticipated

* ReachLocal IPO raised 28 pct less than anticipated

* U.S. markets has worst day since late April 2009

(Adds details on U.S. market slump, analyst comment)

By Clare Baldwin

NEW YORK, May 20 (BestGrowthStock) – Healthcare revenue management
company Accretive Health Inc (AH.N: ) and Internet marketer
ReachLocal Inc (RLOC.O: ) posted strong share gains in their
market debuts on Thursday, even as the broader market fell.

Accretive Health shares jumped 13 percent from their
initial public offering price, while ReachLocal shares soared
15 percent.

The gains bucked a wider market rout as U.S. stocks (Read more about the stock market today. ) slumped
nearly 4 percent on fears efforts to stem Europe’s debt crisis
are not enough and the global economic recovery will stall. The
S&P 500 suffered its steepest percentage drop since late April
2009. [ID:N20219495]

Accretive Health and ReachLocal’s first day gains were in
line with historic first day pops of 10 percent to 15 percent,
but both companies raised significantly less than planned.
Accretive Health fell short by about 40 percent and ReachLocal
raised 28 percent less than it hoped.

“We’re talking about deals that had to be priced deep in
the hole,” said IPO Boutique Senior Managing Partner Scott
Sweet.

Sweet said the order book for ReachLocal was $15 on
Wednesday. Underwriters priced the deal below that, at $13.

Sweet said Accretive Health was also priced below investor
interest levels.

“Until I see a deal priced in range and open at a premium,
I will not consider it an improved IPO market,” he said. “I
don’t consider huge price cuts as an improved IPO market.”

The market for U.S. IPOs has cooled recently, with many new
issues having been pulled, put off or re-priced due to the
market meltdown of the past two weeks, which in turn was caused
by concern the Greek debt crisis could widen.

IPOdesktop.com President Francis Gaskins said Accretive
Health was also likely helped by its business type.

“The segment Accretive is in is an attractive segment. It is
a high multiple segment,” he said.

Accretive Health, which helps U.S. healthcare companies
manage things such as patient registration and billing, sold 10
million shares for $12 each on Wednesday, raising about $120
million. It had planned to sell 13.33 million shares for $14 to
$16 each.

The Chicago, Illinois-based company posted net services
revenue of $125.94 million in the three months ended March 31,
up 12 percent from a year earlier. It swung to a $314,000
profit from a $638,000 loss.

A single customer, Catholic nonprofit healthcare company
Ascension Health, accounted for about 60 percent of its net
services revenue.

ReachLocal sold 4.17 million shares on Wednesday for $13
each, raising about $54.17 million. It had planned to sell
shares for $17 to $19 each.

The Woodland Hills, California-based company sells services
to maximize the effectiveness of online advertising by small
and medium businesses.

The underwriters on the Accretive Health IPO were led by
Goldman Sachs & Co and Credit Suisse. The shares are trading on
the New York Stock Exchange on under the symbol “AH.”

The ReachLocal IPO underwriters were led by JPMorgan and
Bank of America Merrill Lynch. The shares are trading on the
Nasdaq under the symbol “RLOC.”

Investment Tools
(Reporting by Clare Baldwin; editing by Dave Zimmerman, Gary
Hill and Andre Grenon)

WRAPUP 4-Two IPOs rise as U.S. markets fall