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Sprout sets IPO price range
Posted on Monday, 02 December 2019 14:35
Social media management tool Sprout Social could achieve a market capitalisation of USD 885.74 million on admission to trading on Nasdaq after pricing its initial public offering (IPO) at USD 16.00 to USD 18.00 apiece.
At the top end of the range, the loss-making, Chicago-headquartered analytical software company could raise USD 158.76 million from the sale of 8.82 million shares.
This could increase to a total USD 182.65 million in the underwriters, which include Goldman Sachs and Morgan Stanley as bookrunning managers, exercise an overallotment option for a further 1.32 million stocks.
Proceeds will be used for working capital and other general corporate purposes, including investments in products, technology and the group’s salesforce.
Sprout says in its prospective it “is a powerful, centralised platform that provides the critical business layer to unlock the massive commercial value of social media”.
The company’s cloud software allows users to manage their presence on multiple social networks from one central dashboard, as well as monitor, schedule and analyse engagement.
It is not focused on individuals, rather, it caters to small-to-medium-sized businesses, mid-market and enterprise segments and has 23,000-plus customers across 100 countries.
Sprout had generated over USD 100.00 million in total annualised recurring revenue, as of 30th September 2019.
The company booked USD 78.80 million and USD 74.60 million at its top line in the 12 months ended 31st December 2018 and Q1-3 2019, respectively.
It incurred a net loss of USD 20.90 million in FY 2018 (FY 2017: loss of USD 21.90 million) and of USD 21.00 million in Q1-3 2019.
Sprout is backed by: Goldman Sachs, which owns a pre-IPO stake of 35.5 per cent; New Enterprise Associates, with a 30.9 per cent interest; and Lightbank, with a 10.7 per cent participation, among others.
Zephyr, the M&A database published by Bureau van Dijk, shows the listing will be the first by an Illinois technology company this year.
© Zephus Ltd