Oct. 28 (Bloomberg) -- Vitamin Shoppe Inc.’s initial public offering is giving investors a second chance to buy a stake in the retailer of nutritional supplements a decade after its dot- com unit sold shares at the peak of the Internet bubble.

Shares of the North Bergen, New Jersey-based retailer, which trade under the ticker VSI, rose 95 cents, or 5.6 percent, to $17.95 in New York Stock Exchange composite trading today. The stock climbed as much as 19 percent in intraday trading. The company, Blackstone Group LP and the family of founder Jeffrey Horowitz raised $155 million yesterday after selling 9.1 million shares above the forecast price range, according to Bloomberg data. The $17-a-share offer valued Vitamin Shoppe at about $470 million and exceeded the $14 to $16 the company sought.

Vitamin Shoppe was the 17th U.S. company to raise money in an IPO since September, the busiest period in almost two years, as sellers take advantage of the biggest equity rally since the 1930s. The listing was Vitamin Shoppe’s second foray into the IPO market, after the initial sale of its VitaminShoppe.com Inc. unit in 1999 lost more than 90 percent for investors in less than two years as Internet stocks collapsed.

“This is a retail story, not a dot-com story from 10 years ago,” said Scott Billeadeau, who helps manage about $19 billion at Fifth Third Asset Management in Minneapolis. “They’ve raised the price because of demand. It’s a very good story.”

Vitamins, Hardwood Floors

Charlotte, North Carolina-based Bank of America Corp.’s Merrill Lynch & Co. investment banking unit, Barclays Plc in London and New York-based JPMorgan Chase & Co. were the lead underwriters for the sale.

Vitamin Shoppe is the first IPO of a retail chain store since Toano, Virginia-based Lumber Liquidators Inc., which sells hardwood flooring, offered shares in November 2007. Vitamin Shoppe originally sought permission to sell stock in May 2007, before the credit crisis. The company withdrew its registration statement in February of this year and resubmitted it in July.

IPOs have increased after the Standard & Poor’s 500 Index rallied more than 50 percent from a 12-year low in March and the U.S. government lent, spent or guaranteed $11.6 trillion to shore up banks and revive the economy.

Before yesterday’s offerings, the amount raised in IPOs since September accounted for almost two-thirds of this year’s $11.3 billion in sales. The last time more U.S. companies went public over a two-month period was in December 2007 and January 2008, when there were 26, data compiled by Bloomberg show.

‘New Condition’

Palatine, Illinois-based Addus HomeCare Corp., which provides home nursing care, sold 5.4 million shares at $10 apiece yesterday, lower than its forecast range of $11 to $13. Addus slumped $1.51, or 15 percent, to $8.49 in Nasdaq Stock Market composite trading.

“There is an IPO market now, which is a new condition,” said Lawrence Creatura, who invests in small-company stocks at Pittsburgh-based Federated Investors Inc., which oversees about $400 billion globally. “We came through a period when access to equity capital was impossible.”

Vitamin Shoppe sold 7.67 million shares. New York-based Blackstone, the world’s largest private-equity firm, and the Horowitz family offered a combined 1.43 million shares, according to planned offer amounts in a regulatory filing.

After the IPO, Vitamin Shoppe will be 55 percent controlled by Irving Place Capital, the former Bear Stearns Cos. buyout fund that oversees $4.4 billion, the filing showed. The New York-based private-equity firm didn’t offer any common stock in the sale.

Long-Term Debt

Vitamin Shoppe intends to use its portion of the IPO proceeds to redeem about $64 million in preferred stock held by its owners and repay about $40 million in debt, according to the regulatory filing. The retailer had about $165 million in long- term debt prior to the offering.

The company earned 37 cents a share in the six months that ended in June, the regulatory filing showed. That implies a valuation of about 23 times profit over a full year, cheaper than the average ratio of 26.5 times estimated 2009 earnings for companies in the S&P SmallCap 600 Index, data compiled by Bloomberg show.

The vitamin retailer was founded by Jeffrey Horowitz in 1977 and opened its first store on the corner of 57th Street and Lexington Avenue in New York. Horowitz sold 70 percent of the company to the private-equity unit of JPMorgan and FdG Associates in 1997.

One Dollar

Vitamin Shoppe offered shares in its online unit VitaminShoppe.com on Oct. 7, 1999, raising $50 million. VitaminShoppe.com fell 11 percent on the first day of trading on the Nasdaq Stock Market. The shares rebounded and reached an all-time high of $17.1875 on Nov. 26, 1999.

The company then tumbled more than 90 percent as the technology bubble burst and it posted five consecutive quarters of losses. VitaminShoppe.com was delisted on April 16, 2001, after its parent company took it private for $1 a share.

Irving Place, then known as Bear Stearns Merchant Banking, paid $310 million to buy a controlling stake in Vitamin Shoppe in December 2002.

IPOs evaporated in the fourth quarter of last year after New York-based Lehman Brothers Holdings Inc. filed for the world’s biggest bankruptcy and caused a credit-market freeze. Only one company, Phoenix-based Grand Canyon Education Inc., sold stock in the last three months of 2008.

Smallest Advantage

The drought lasted until September as an average of two U.S. companies a month went public, the slowest pace since at least 1995. While the number of deals has picked up, IPO performance has been the worst since at least 1995, data compiled by Bloomberg show.

The IPOs of 16 American companies since September have beaten the S&P 500 by 1.2 percentage points on average in the first month of trading through yesterday, the smallest margin in Bloomberg data going back 14 years. Offerings by U.S. companies have beaten the S&P 500 by an average 21.3 percentage points after their listings, the data show.

Before yesterday’s IPOs, five companies had to cut their offer to attract investors. Only two companies -- Jersey City, New Jersey-based Verisk Analytics Inc. and A123 Systems Inc. of Watertown, Massachusetts -- priced shares above forecast range.

Outside the U.S., PGE SA, Poland’s largest power group, priced Europe’s biggest IPO this year at the top of its range yesterday, valuing the Warsaw-based company at 5.97 billion zloty ($2.1 billion). Shares of the company will start trading on the Warsaw Stock Exchange by Nov. 6.

To contact the reporters on this story: Michael Tsang in New York at mtsang1@bloomberg.net; Rita Nazareth in New York at rnazareth@bloomberg.net.

Last Updated: October 28, 2009 19:36 EDT