Tags: data | backoffice | IPO

Data Manager BackOffice Associates in Talks for IPO

Monday, 14 May 2012 05:06 PM

 

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BackOffice Associates LLC, a provider of data management software and services, is talking to bankers about an initial public offering, Chief Executive Officer David Booth said.

Goldman Sachs Group Inc., an investor in the South Harwich, Massachusetts-based company, is among banks discussing an IPO, Booth said in an interview. BackOffice hasn’t determined the size or price, though Booth said the company might sell more than a 10 to 15 percent stake. Proceeds would fund acquisitions and expansion outside the U.S.

“In the next 12-15 months, we’ll be ready to file an S- 1,” Booth said, referring to the U.S. regulatory filing required before an IPO. “That’s the direction.”

BackOffice is meeting with bankers following the successful debut of Web-data analysis provider Splunk Inc., which has surged 82 percent since its IPO in April. John Kinzer, who helped take education-software maker Blackboard Inc. public in 2004, joined BackOffice as chief financial officer last week, when the company also added former SAP AG executive Rex Ahlstrom as chief strategy officer and hired Mark Logan to lead sales.

Founded in 1996, BackOffice has about 350 clients -- including many Fortune 500 companies -- which use its software and services to streamline databases for sales and customer contacts. It helps businesses switch from custom database systems to alternatives made by SAP or Oracle Corp.

The global market for master data management software will grow 21 percent to $1.9 billion this year, estimates researcher Gartner Inc. Other companies competing for this market include Informatica Corp., Talend, Utopia Inc. and International Business Machines Corp.

Revenue Growth

BackOffice is “highly” profitable, and has annual sales of $100 million to $200 million, Booth said. Revenue growth is in double-digits, he said.

At about three times sales -- a valuation typical for this market -- the company may be worth $300 million to $600 million, said Tom Taulli, who runs IPOPlaybook.com in Newport Beach, California.

“Data is a hot business right now,” Taulli said in an interview. “The company is addressing a pain point for customers.”

The company is expanding operations in Canada, Brazil, U.K. and Germany, and later plans to expand in Japan, China and Australia, Booth said. Typically, BackOffice has bought one company a year.

“My expectation would be we’d ratchet that up,” Booth said. “We’ll be looking at acquiring some of the smaller players out there. In the next several years, we believe we can grow to a $500 million company and eventually to $1 billion.”

Michael Duvally, a Goldman Sachs spokesman, declined to comment.

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