Imprivata Inc. (IMPR), a provider of authentication and access management software to the healthcare industry, plans to raise $75.0 million in its upcoming IPO.
The Lexington, Massachusetts-based firm will offer 5.0 million shares at an expected price range of $14-$16 per share. If the IPO reaches the midpoint of that range at $15 per share, IMPR will command a market value of $387 million.
Underwriting
IMPR filed on March 31, 2014.
Lead Underwriters: J.P. Morgan Securities LLC; Piper Jaffray & Co.
Underwriters: Stephens Inc.; Wells Fargo Securities, LLC; William Blair and Co., L.L.C
Overview of IMPR's Authentication and Access Solutions
IMPR provides authentication and access management technology solutions to the healthcare industry through its OneSign platform, a single sign-on authentication and workflow automation system.
The firm hopes to capitalize on ever-increasing quantities of electronic medical information available to healthcare providers by simplifying the process of accessing that information. The platform allows clinicians to avoid the process of logging on to multiple secure systems, saving potentially valuable minutes for patients and improving work efficiency for healthcare workers. OneSign gives healthcare enterprises the option to replace traditional log-in methods with faster authentication systems like proximity cards and fingerprint biometrics.
OneSign had more than 2.8 million licensed users through over 950 healthcare organizations as of March 31, 2014. The firm's customers include academic medical facilities, integrated healthcare systems, and independent healthcare facilities. OneSign has also made inroads in industries outside of healthcare, with over 770,000 licensed users across more than 400 non-healthcare organizations.
Valuation
IMPR offers the following figures in its S-1 balance sheet for the three months ended March 31, 2014:
Revenue: $19,440,000.00
Net Loss: ($7,067,000.00)
Total Assets: $35,626,000.00
Total Liabilities: $39,933,000.00
Stockholders' Equity: ($97,152,000.00)
IMPR has experienced strong revenue growth in recent years; the firm posted revenues of $41.4 million, $54.0 million, and $71.1 million in calendar 2011, 2012, and 2013, respectively. However, the firm has seen shrinking profits over the same period; the firm posted net incomes of $2.7 million and $1.0 million in 2011 and 2012, respectively, and a net loss of $5.5 million in 2013. As of March 31, 2014, IMPR had an accumulated deficit of $97.2 million.
Strong Competitors
IMPR competes with other firms offering authentication and workflow streamlining solutions. Many of these firms are better capitalized than IMPR, or may be able to take advantage of existing relationships with healthcare organizations. IMPR believes its primary competitor to be Caradigm USA LLC, which is a joint venture by Microsoft Corporation (MSFT) and General Electric (GE).
Management Overview
Omar Hussain has served as the president and CEO of IMPR since 2005. Mr. Hussain previously served as the firm's senior vice president of Marketing and Operations.
Before joining IMPR, Mr. Hussain served as the CEO of Anchorsilk, Inc., and as general manager of Compuware Corporation's NuMega Labs; he also served as vice president of Marketing at NuMega.
Mr. Hussain graduated from Allegheny College in Pennsylvania.
Conclusion
We are positive on this IPO for aggressive growth investors.
IMPR faces some far larger competitors, and though its focus on the healthcare industry may allow it to differentiate itself from those competitors, it ultimately is banking on an expensive product as the United States struggles to contain healthcare costs.
Tech IPOs are presently seeing success, and we are hearing that this deal is in excellent shape.
Note: As a large sample of information sources does not yet exist for IMPR, we have taken much of the information for this article directly from IMPR' S-1 filing.
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Disclosure: The author has no positions in any stocks mentioned, but may initiate a long position in IMPR over the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.
