Market Conditions Still A Concern For GlassHouse IPO
The last time Framingham-based GlassHouse Technologies attempted to make an initial public offering of its stock, it was on the eve of the near collapse of the IPO market in early 2008.
Now, the company is trying again and this time around the IPO market is in recovery.
"It's still a tough market out there, but IPO's are picking up," said David Wolf, managing director of the Wayland business consulting agency Mercator Group, which specializes in mergers and acquisitions and other business exit strategies.
Earlier this month GlassHouse Technologies filed updated plans for a $75 million IPO with the Securities and Exchange Commission.
The company hopes to pay off about $30.2 million in debt it owes Dell Products LP as well as pay about $10.2 million to purchase a Dutch technology company. The company filed its second IPO attempt originally in January and since then has filed three amendments.
A Tepid Market
GlassHouse was far from alone in nixing its IPO plans two years ago. The number of IPO withdrawals more and doubled from 25 to 58 between 2007 and 2008, according to Greenwich, Conn.-based IPO tracking firm Renaissance Capital.
Since then, IPO activity has picked up. So far there have already been four times as many IPOs this year as there were during the same period in 2009, according to Renaissance.
Wolf, of Mercator Group, said GlassHouse's financials, along with its public offering documents, look relatively strong, but it's difficult to predict how well the offering will be received.
The company has been increasing its revenues for each of the last three years while narrowing its losses. The company ended 2009 with a $7.9 million loss on $89 million in revenues.
Underwriters of the GlassHouse IPO include Goldman Sachs, Credit Suisse, Stifel, Nicolaus & Co., William Blair & Co. and Oppenheimer & Co. Inc. Wolf said having names like that backing the offering is a good sign.
"It looks like they have some strong partners, so especially for some of these larger companies that have a chance of reaching profitability, there should be an IPO window," he said.
Still, IPOs are not nearly the money makers they were just a few years ago.
Last year companies raised $22.5 billion through IPOs, according to Renaissance Capital. That compares to $60 billion raised in 2007 and $97 billion in 2000.
WBJ Web Partners
Most Recent
Most Recent
0 Comments