November 12, 2007
Deltek Announces Pricing of IPO
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Susan Smith, Managing Editor
Deltek Announces Pricing of IPO
by Susan Smith
On November 1, Deltek, Inc.
announced the pricing of its initial public offering of 9,000,000 shares of its common stock at $18.00 per share. According to the press release, of the shares offered, 3,009,475 were offered by Deltek and 5,990,525 were offered by selling shareholders. AECWeekly talked with Warren Brown, VP, Strategic Communications for Deltek, about the announcement.
What led up to the decision to do an IPO?
It was a point in time for us to do this, because of the growth in the company, this will help us look at future acquisitions. We've done five acquisitions in the past two years, so this enables to continue doing that, as well as paying down some debt.
It helps our investment firm, New Mountain Capital, recoup their investment in the company.
Does this open up any more opportunities for R&D?
No more than we had planned. Our plans as far as R& D are built into our current operating procedures so I wouldn't say anything would change because of the IPO, it just enables R&D more as we keep going.
The product lines will remain the same, it's business as usual.
When did the stock begin trading?
It started trading on November 1 at 11 a.m. on the NASDAQ Global Select Market under the trading symbol "PROJ." The offering was expected to close on November 6, 2007, subject to customary conditions. When it first started trading, the strike price was $18 which was right in the middle of the range we were hoping to get which was between $17 and $19. The day we went out it was a horrible day on NASDAQ and the market as a whole had dropped over 300 points but we were able to finish just 3 cents below our strike price, so we did very well over all.
This is a marathon not a sprint, so we look at it as we're going to focus on the long term here, for the company.
Did you have shareholders already lined up for this?
It was all part of the investment road show that they conduct prior to the public date of November 1, so they were already over subscribed.
What about the debt that was paid?
The prospectus indicates we will use all $42.6M in net proceeds to pay down debt. The vast majority of the debt was incurred during the recapitalization transaction in April of 2005 when New Mountain Capital purchased about 75% of Deltek.
Is there anything significant about this IPO?
For the metro DC area, it's one of the biggest software IPOs that has happened in recent times, as a result of our growth and our success over the years. We've had over 24 years experience in the business and we are the only ones in the sector to do project based applications the way we do. If you look at the general ones, like SAP or Oracle, they're kind of the general practitioners and we are the cardiologists. We're very specialized in our market and no one does what we do. We have a huge market capability and we have no real direct competition. There are others that do what we do but they don't do it in as specialized a way.
What is your market comprised of?
A/E and government contractors that need auditing capabilities for all their project management of government contracts. In fact, govcon is a big portion of our business. Consultancy groups is an emerging business for us. Anyone who is using a project based business could utilize us, even down to advertising or PR firms that operate projects.
How many employees?
We have 14 offices globally, the biggest offices are in the Herndon, Virg. area and in Cambridge, Mass. where a lot of our product development takes place.
What is the value of the company?
With regards to the companies valuation; We don't calculate a valuation but based on yesterday's [Monday, November 5, 2007] closing price our current market cap would be approximately $740M.
Top News of the Week
Bentley Systems, Incorporated announced its trial program for generative design in architecture and engineering. The program, which opens Nov. 16, 2007, will include a no-charge 90-day subscription to GenerativeComponents - Bentley's generative design software - and a Web 2.0 community "space" for users to accelerate their learning and to share ideas about this new approach to design.
GenerativeComponents was initiated by a research project led by Bentley Building's director of research, Robert Aish, Ph.D., and has been adopted in many elite design projects around the world. GenerativeComponents uniquely preserves and exploits the critical relationships between design intent and geometry.
Autodesk, Inc. announced that it has signed an agreement to acquire Hanna Strategies, an engineering services firm that offers software development with centers in Shanghai, China, Atlanta, Georgia and Pune, India. In 2006, Autodesk purchased an ownership interest in Hanna Strategies and is now acquiring the remaining ownership. Terms of the transaction were not disclosed.
ARCHIBUS, Inc., provider of real estate, infrastructure and facilities management solutions, has been named an authorized Autodesk Independent Software Vendor (ISV) Partner.
The ISV Partner designation from Autodesk, Inc. enables ARCHIBUS to be a one-source solution for clients who recognize the benefit of pairing the ARCHIBUS solution for real estate, infrastructure, and facilities management with complementary building and construction information from Autodesk solutions.
Meridian Systems, software solutions provider for improving capital program and construction project performance, announced a new reseller agreement with Haxis Consultoria, located in Panama City, Panama.
As an authorized Meridian reseller, Haxis Consultoria will resell Prolog® software and related products to Meridian customers in Panama, as well as offer ongoing consulting, implementation and training services beyond the initial purchase and installation. Prolog is an industry standard for successful construction project delivery.
NEC Display Solutions of America, a stand-alone provider of LCD desktop and commercial large-screen LCDs, plasma displays and projectors, announced its new dual-display desktop LCD product bundle. The new desktop solution includes two NEC 19-inch MultiSync LCD195VX+ displays and Matrox's DualHead2Go Graphics eXpansion Module (GXM), an external multi-display upgrade.
Two leaders in different industries have agreed on a close cooperation: ArcelorMittal as the number one steel producing company and Nemetschek AG as the leader in software for design, construction and facility management. Nemetschek will implement part of the ArcelorMittal predesign software in its integrated program suites for modeling, designing and detailing structures. Both companies want to stimulate innovation in the construction industry, in continuous search of cost-effective solutions and productivity enhancements.
Beck Technology and Innovaya announced a development partnership to provide end-to-end cost estimating from concept to build. Through integrations with Sage Timberline Office, they provide customers with cost consistency across all project phases.
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