This Week's IPOs I: Animal Health Int'l, Dekania Corp., Duncan Energy Partners, Employers Holdings, HFF Inc.

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 |  Includes: AHII, DEK, DEP, EIG, HF
by: Abbi Adest

The IPOs on deck for this week include: Animal Health International (NASDAQ:AHII), a distributor of animal health products; Dekania Corp. (DEK), a blank check corporation targeting the insurance industry; Duncan Energy Partners (NYSE:DEP) a limited partnership formed by Enterprise Products Partners last September; Employers Holdings (NYSE:EIG), a workers' compensation insurance provider for small businesses; and HFF Inc. (NYSE:HF), a commercial real estate intermediary.

All quotations are from the companies' most recent S-1 filings with links provided for each company.

ANIMAL HEALTH INTERNATIONAL (AHII)
Business Overview (from prospectus)

Based upon net sales, we believe we are the largest distributor of animal health products in the United States. We sell more than 35,000 products sourced from over 1,500 manufacturers to over 62,000 customers, as well as provide consultative services to our customers in the highly fragmented animal health products industry. Products we distribute include pharmaceuticals, vaccines, parasiticides, diagnostics, capital equipment, sanitizers, devices and supplies. Our principal customers are veterinarians, production animal operators and animal health product retailers. We believe our customers purchase from us due to our longstanding relationships with them, knowledge of their businesses, service and ability to assist them in their operations. We have a 278 person sales force, including 223 field sales representatives. We process daily shipments from our central replenishment and distribution facility in Memphis, Tennessee and 68 distribution locations strategically located across the United States and Canada.

Offering: 11.8 million shares at $10-12 per share. Net proceeds of approximately $90.9 million will be used to repay debt and for general working capital.

Lead Underwriters: J.P. Morgan, Piper Jaffray

Financial Highlights:

Net sales increased $18.0 million, or 14.1%, to $145.7 million for the three months ended September 30, 2006, from $127.7 million for the three months ended September 30, 2005...Gross profit increased by $2.3 million, or 9.2%, to $27.1 million for the three months ended September 30, 2006, from $24.8 million for the three months ended September 30, 2005... Gross profit as a percentage of sales was 18.6% for the three months ended September 30, 2006, compared to 19.4% for the three months ended September 30, 2005...Selling, general and administrative expenses, excluding depreciation and amortization, increased by $1.2 million, or 6.4%, to $20.1 million for the three months ended September 30, 2006, from $18.9 million for the three months ended September 30, 2005.

DEKANIA CORP. (DEK)
Business Overview (from prospectus)

We are a recently organized blank check company known as a Business Combination Company™, or BCC™. We were incorporated under Delaware law on February 28, 2006 for the purpose of acquiring one or more businesses through a business combination. We intend to focus our efforts on identifying businesses that operate within the U.S. insurance industry with particular interest in businesses that provide insurance coverage for uncommon or hard-to-place risks, an area known as specialty insurance. We have not identified or begun discussions with any target business. Moreover, we have not engaged or retained any agent or other representative to identify or locate any suitable target business.

Offering: 9.7 million shares at $10 per share. Net proceeds of $97 million will be used to repay shareholders if the company does not succeed in creating a profitable concern.

Lead Underwriters: Merrill Lynch

Financial Highlights:

We expect to use substantially all of the net proceeds of this offering and the private placement to acquire a target business, including payment of expenses we incur in identifying and evaluating prospective acquisition candidates, selecting the target business, and structuring, negotiating and consummating the business combination. To the extent that we use debt or equity securities as consideration in a business combination and do not use all of the funds in the Trust Account, we will use the remaining Trust Account funds to finance the operations of the target business. We believe that the $2,500,000 that we are allowed to draw from interest earned on the Trust Account will be sufficient to allow us to operate for at least the next 24 months, even if we do not complete a business combination during that time.

Our Sponsor has loaned us $300,000 which we used to pay a portion of the expenses of this offering, such as SEC registration fees, NASD registration fees, blue sky fees and expenses, fees relating to listing our securities on the American Stock Exchange and legal and accounting fees and expenses. This loan is payable without interest solely from the proceeds of this offering.


DUNCAN ENERGY PARTNERS LP (DEP)

Business Overview (from prospectus)

We are a Delaware limited partnership formed by Enterprise Products Partners in September 2006 to own, operate and acquire a diversified portfolio of midstream energy assets. We are engaged in the business of gathering, transporting, marketing and storing natural gas and transporting and storing natural gas liquids, or NGLs, and petrochemicals. Our assets were previously owned by Enterprise Products Partners and are part of its integrated midstream energy asset network, or “value chain,” which includes natural gas gathering, processing, transportation and storage; NGL fractionation (or separation), transportation, storage and import and export terminaling; crude oil transportation; and offshore production platform services. After this offering, we will own 66% of the equity interests in the subsidiaries that hold our operating assets, and affiliates of Enterprise Products Partners will continue to own the remaining 34%. We believe our relationship with Enterprise Products Partners will enable us to maintain stable cash flows and optimize our scale, strategic location and pipeline connections.

Offering: 13 million shares at $19-21 per share. Net proceeds of approximately $243.4 million will be used to reimburse Enterprise Products OLP for capital expenditures; help fund the company's 66% share in the expansion of the South Texas NGL pipeline system and brine production and above-ground storage projects at Mont Belvieu; and for general corporate purposes.

Lead Underwriters: Lehman Brothers, UBS Investment Bank

Financial Highlights:

Combined revenues for the first nine months of 2006 were $740.1 million compared to $649.4 million for the first nine months of 2005...Gross operating margin from the NGL & Petrochemical Storage Services segment was $15.1 million for the first nine months of 2006 compared to $7.8 million for the first nine months of 2005...Gross operating margin from the Natural Gas Pipelines & Services segment was $17.1 million for the first nine months of 2006 versus $19.7 million for the first nine months of 2005...Gross operating margin from the Petrochemical Pipeline Services segment was $26.1 million for the first nine months of 2006 compared to $22.1 million for the first nine months of 2005.


EMPLOYERS HOLDINGS (EIG)

Business Overview (from prospectus)

We are a specialty provider of workers’ compensation insurance focused on select small businesses engaged in low to medium hazard industries. Our business has historically targeted employers located in several western states, primarily California and Nevada. We believe that the market we serve has, to date, been characterized by fewer competitors, more attractive pricing and strong persistency, or repeat business, when compared to the U.S. workers’ compensation insurance industry in general. We distribute our products almost exclusively through independent agents and brokers and our strategic distribution relationships.

Offering: 23 million shares at $14-16 per share. Net proceeds of approximately $321.7 million, (or $370.0 million if the underwriters exercise their over-allotment option in full) will be used to pay all fees and expenses in connection with the conversion and this offering and all cash consideration payable to all eligible members of EIG who are not eligible to receive our common stock in the conversion. Proceeds will also be used to pay eligible members of EIG who chose to receive cash instead of common stock. Based on the number of cash elections received from our members, no net proceeds will remain after all of the foregoing amounts have been paid in full.

Lead Underwriters: Morgan Stanley, Fox-Pitt Kelton

Financial Highlights:

Gross premiums written decreased $41.4 million, or 11.8%, to $310.3 million for the nine months ended September 30, 2006 from $351.7 million for the nine months ended September 30, 2005...Net premiums written decreased $36.8 million, or 11.0%, to $299.5 million for the nine months ended September 30, 2006 from $336.3 million for the nine months ended September 30, 2005...Net premiums earned decreased $31.0 million, or 9.3%, to $300.1 million for the nine months ended September 30, 2006 from $331.1 million for the nine months ended September 30, 2005...Net income increased $53.4 million, or 84.6%, to $116.5 million for the nine months ended September 30, 2006 from $63.1 million for the nine months ended September 30, 2005...Total revenues of $496.5 million and $359.2 million for the year ended December 31, 2005 and the nine months ended September 30, 2006, respectively.

HFF INC (HF)
Business Overview (from prospectus)

We are a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry based on transaction volume and are one of the largest private full-service commercial real estate financial intermediaries in the country. We operate out of 18 offices nationwide with more than 130 transaction professionals and approximately 270 support associates. In 2005, we advised on approximately $32 billion of completed commercial real estate transactions, more than a 40% increase compared to the approximately $22 billion of completed transactions we advised on in 2004.

Offering: 14.3 million shares at $15-17 per share. Net proceeds of approximately $209.0 million will be used to "purchase additional shares, to purchase from HFF Holdings all of the shares of Holliday GP and partnership units representing approximately 39% of each of the Operating Partnerships, or partnership units representing 45% of each of the Operating Partnerships if the underwriters exercise in full their option to purchase additional shares. HFF Holdings will use approximately $56.3 million of the sale proceeds to repay all outstanding borrowings under HFF LP’s credit agreement. Accordingly, we will not retain any of the proceeds from this offering."

Lead Underwriters:Goldman Sachs, Morgan Stanley

Financial Highlights:

Our total revenues were $156.5 million for the nine months ended September 30, 2006 compared to $137.3 million for the same period in 2005, an increase of $19.2 million, or 14.0%...Our total operating expenses were $123.3 million for the nine months ended September 30, 2006 compared to $108.3 million for the same period in 2005, an increase of $15.0 million, or 13.8%...Our net income for the nine months ended September 30, 2006 was $31.7 million, an increase of $2.7 million, or 9.3%, versus $29.0 million for the same fiscal period in 2005.