Salesforce yesterday filed an updated prospectus which set an expected share price of $9.50. In the prospectus, it said the final price per share could range between $9 and $10, which would value the company at as much as $1bn. The range listed in yesterday’s filing was well above the $7.50 to $8.50 set by the company back in April.
However, late last night, reports said the company and its advisors had finally settled on a price of $11 per share, valuing Salesforce at $1.1bn. A Salesforce spokeswoman could not comment on the offering.
According to the prospectus filed with the Securities Exchange Commission yesterday, San Francisco-based Salesforce planned to offer 10,000,000 shares, and underwriters had the right to purchase an additional 1,500,000. The total outstanding shares after the IPO will be 101,256,880.
Yesterday’s prospectus listed the usual reasons for seeking an IPO, and had the customary exhaustive list of possible risk factors for prospective investors.
Salesforce said it expected net proceeds of between $84.4m and $97.6m, depending on whether the underwriters take up their full over-allotment. However, at the $11 per share price, the proceeds will be higher. The firm said it had not designated any specific purposes for this influx of capital, which will be used for general corporate purposes.
While some of the cash may be used for investments or acquisitions, the prospectus said Salesforce has no current agreements or commitments for any such deals, and is not in any negotiations that could lead to any.
The company originally declared its intention to go for an IPO last December. It was forced to delay the offering last month after the New York Times ran an article on Salesforce chairman and CEO Marc Benioff.
The delay means Salesforce is hitting a market that is more confident about the direction of the economy overall, and the pace of IT spending.
But everyone knows where the proof a pudding really lies. When trading begins, Benioff will no doubt be straining to see if the company’s shares rise to the occasion or fall embarrassingly flat – his counterparts at other IPO candidates, including search giant Google, will surely be watching equally closely.
