NetSuite IPO A Success

NetSuite, the on-demand ERP vendor, has announced that its IPO has garnered it $185.4 million in sale of 6.2 million shares. Each share cost $26 and is a good $13 more than the $13-$16 that NetSuite officials thought the share would sell for. The IPO was launched on December 10. Oracle CEO Larry Ellison and his family owned almost three-fourths of NetSuite prior to the IPO. Their share is expected to fall to sixty six percent after the IPO. NetSuite plans to use the cash to make some acquisitions and repay $8 million balance on a secured line of credit to Tako Ventures, which is controlled by Larry Ellison.

NetSuite’s expected and awaited entry into the public market has an interesting history. NetSuite goes back a long way with SAP. In fact, the company started life as NetLedger – a small business arm of SAP. As NetLedger came into its own, it changed its name to NetSuite and acquired an independent identity. Around this time SaaS was really taking off and Salesforce.com was stealing a march on the rest. Oracle decided to eliminate some competition for NetSuite and purchased Siebel Systems which was one of the main competitors of NetSuite. One of the major factors in NetSuite going public was its rise in revenue that rose 63% to $76.8 million. Although, interestingly the company still reported a loss of $20.6 million.