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Summary

  • IMPR is a leading provider of authentication and access management technology solutions for the healthcare industry.
  • As of March 31, 2014, its Imprivata OneSign solution had over 2.8 million licensed users in over 950 healthcare organizations in 20 countries.
  • Q1 '14's loss increased to -$7 million from -$1.5 million, in large part to increased sales and marketing expenses.

Based in Lexington, MA, Imprivata (NYSE:IMPR) scheduled a $75 million IPO on the NYSE with a market capitalization of $342 million at a price range midpoint of $15 for Wednesday, June 25, 2014.

The full IPO calendar is available at IPOpremium

SEC Documents

Manager, Joint managers: JPMorgan, Piper Jaffray

Co-Managers: William Blair, Wells Fargo Securities, Stephens

End of lockup (180 days): Monday, December 22, 2014

End of 25-day quiet period: Monday, July 21, 2014

Summary

IMPR is a leading provider of authentication and access management technology solutions for the healthcare industry.

As of March 31, 2014, its Imprivata OneSign solution had over 2.8 million licensed users in over 950 healthcare organizations in 20 countries.

Valuation

Glossary

Valuation Ratios

Mrkt Cap (MM)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

annualizing Q1 '14

Imprivata

$342

4.4

-12.0

5.5

6.1

22%

Conclusion

IMPR has a large market share and should be profitable by now. Only half of revenue is from sales of new perpetual licenses, the other half is recurring maintenance revenue.

Q1 '14's loss increased to -$7 million from -$1.5 million due in large part to increased sales and marketing expenses. IMPR should have managed its income statement better in the quarter prior to its IPO.

The rating on IMPR is neutral.

To put the conclusions and observations in context, the following is reorganized, edited and summarized from the full S-1 referenced above.

Business

IMPR is a leading provider of authentication and access management technology solutions for the healthcare industry.

IMPR's flagship solution, Imprivata OneSign, is an integrated enterprise single sign-on, authentication and access management and workflow automation platform that addresses multiple security and productivity challenges faced by hospitals and other healthcare organizations.

Healthcare information access

By enabling fast, secure access to healthcare information technology systems, IMPR believes its solutions save clinicians significant time to focus on patient care, increase their productivity and satisfaction, and help healthcare organizations comply with complex privacy and security regulations.

Imprivata OneSign can be installed on every workstation and other application access points throughout a healthcare organization and once deployed becomes a critical part of the customer's security and access infrastructure.

Widely used

As a result, IMPR believes that Imprivata OneSign is one of the most widely used technology solutions by its customers' physicians, nurses and other clinicians.

As of March 31, 2014, its Imprivata OneSign solution had over 2.8 million licensed users in over 950 healthcare organizations in 20 countries, including large integrated healthcare systems, academic medical centers and small- and medium-sized independent healthcare facilities.

Many other industries face security and productivity challenges similar to those in healthcare.

Although healthcare is its primary focus, as of March 31, 2014 Imprivata OneSign had over 770,000 licensed users in over 400 non-healthcare organizations, including financial services, public sector and other industries.

Direct sales and sales partners

IMPR sells its solutions through its direct sales force and sales partners in the United States and internationally.

Perpetual license

IMPR derives substantially all of its revenue from sales of its Imprivata OneSign solution, which is sold primarily on a perpetual license basis.

Income statement summary

For the years ended December 31, 2011, 2012 and 2013 and the three months ended March 31, 2013 and 2014, IMPR generated 35%, 41%, 41%, 34%, and 44%, respectively, of its revenue through its direct sales force, with the remaining revenue generated through its sales partner relationships.

In the years ended December 31, 2011, 2012 and 2013 and the three months ended March 31, 2013 and 2014, no single end customer accounted for more than 5% of IMPR's total revenue.

Dividend Policy

No dividends are planned.

Intellectual Property

IMPR has been granted 21 U.S. patents, including patents on aspects of its Imprivata OneSign solution.

The expiration dates of these patents range from October 28, 2014 through April 29, 2032 (not accounting for any patent term extension).

Currently IMPR has 12 utility patent applications and 1 provisional patent application pending in the United States.

IMPR conducts business under Imprivata OneSign and Imprivata Cortext trademarks, among others.

Competition

IMPR's primary competitor in the healthcare market is Caradigm USA, LLC, a joint venture of General Electric Company and Microsoft Corporation.

IMPR also competes with several smaller providers of authentication and access management solutions focused on the healthcare market, as well as several large identity and access management vendors that are not specifically focused on the healthcare market.

5% stockholders

  • Entities affiliated with General Catalyst Group II, L.P. 25.1%
  • Entities affiliated with Highland Capital Partners VI Limited Partnership 25.1%
  • Entities affiliated with Polaris Venture Partners III, L.P. 25.1%

Use of proceeds

IMPR expects to net $66 million from its IPO. Proceeds are allocated as follows:

  • general corporate purposes, including working capital. IMPR may also use a portion of the net proceeds to acquire or invest in complementary businesses, technologies or assets. IMPR has no present understandings, commitments or agreements to enter into any such acquisitions or make any such investments.

Disclaimer: This IMPR IPO report is based on a reading and analysis of IMPR's S-1 filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Source: IPO Preview: Imprivata