SPS Commerce (SPSC), a provider of on-demand supply chain management software, priced its IPO on Wednesday April 21 at $12 per share, within range.
Business Overview (from prospectus)
We are a leading provider of on-demand supply chain management solutions, providing integration, collaboration, connectivity, visibility and data analytics to thousands of customers worldwide. We provide our solutions through SPSCommerce.net, a hosted software suite that uses pre-built integrations to enable our supplier customers to shorten supply cycle times, optimize inventory levels, reduce costs and satisfy retailer requirements. As of December 31, 2009, we had over 11,000 customers with contracts to pay us monthly fees, which we refer to as recurring revenue customers. We have also generated revenues by providing supply chain management solutions to an additional 24,000 organizations that, together with our recurring revenue customers, we refer to as our customers. Once connected to our platform, our customers often require integrations to new organizations that allow us to expand our platform and generate additional revenues.
Offering: 4.1 million shares at $12 per share. Net proceeds of approximately $26.1 million will be used to repay debt, for working capital and general corporate purposes.
Lead Underwriters: Thomas Weisel Partners (TWPG), William Blair
Revenues for 2009 increased $7.0 million, or 23%, to $37.7 million from $30.7 million for 2008... Cost of revenues for 2009 increased $2.4 million, or 27%, to $11.7 million from $9.3 million for 2008... Sales and marketing expenses for 2009 increased $1.0 million, or 8%, to $13.5 million from $12.5 million for 2008... General and administrative expenses for 2009 decreased $377,000, or 6%, to $6.3 million from $6.7 million for 2008.
Software-as-a-Service vendors also compete with traditional on-premise software companies and managed service providers. Traditional on-premise software companies focused on supply chain integration management include Sterling Commerce, a subsidiary of AT&T (T), GXS Corporation, Inovis, Extol International and Seeburger. These companies offer a “do-it-yourself” approach in which customers purchase, install and manage specialized software, hardware and value-added networks for their supply chain integration needs. This approach requires customers to invest in staff to operate and maintain the software. Traditional on-premise software companies use a single-tenant approach in which information maps to retailers are built for and used by one supplier, as compared to Software-as-a-Service solutions that allow multiple customers to share information maps with a retailer.
- Company website
- WSJ: 'Busy Day For US IPOs Produces Only One Hit: SPS Commerce'
- MarketWatch: 'SPS Commerce shares soar 17% in IPO'
- Bill Simpson: 'IPO Week in Review: Few Deals Proved Enticing'