The Ultimate Software Group, Fort Lauderdale, Florida-based provider of human resources and payroll management software, launched its initial public offering of 3.25 million shares of common stock at $10 each – below the estimated range of $11 to $13. Wall Street gave the stock a rather cold reception over profitability concerns for the company, which has posted a trail of losses since last year, according to the prospectus for the offering. The prospectus also noted the likelihood of unstable quarterly earnings over the next couple of years. All the stock in the offering was being sold by the company. The shares, which are trading on the Nasdaq National market under the ticker symbol ULTI, traded only as high as $10.1875 before closing the day at $10.0313. US Group expects to use the net proceeds from the offering to repay debt of $3.6m and for general corporate purposes, including working capital. Lead underwriters for the offering were Donaldson, Lufkin & Jenrette Securities Corp; and Volpe Brown Whelan & Co, and were granted a 30-day option to purchase up to an aggregate of 328,500 additional shares at the IPO price to cover over-allotments, if any. US Group designs and markets its UltraPro human resource management and payroll systems to mid-tier businesses. The company employs 280 people and markets its software through a direct sales force in 26 cities. It claims 850 customers.
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