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THE DAY AHEAD: Calico&#039s clientele + commerce focus = a hot IPO

If an initial public offering is judged by the customers and partners a company keeps Calico Commerce Inc. shouldn't have any problem attracting Wall Street's interest.

Calico Commerce, which makes e-commerce software for corporations, will offer 3.93 million shares this week with a price range of $12 to $14. Calico is tentatively scheduled to price Monday night for trading Tuesday.

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So why does Calico (Proposed ticker: CLIC) have the wind at its back? For starters, it's one of those so-called infrastructure IPOs. If you haven't noticed most IPOs dealing with Internet infrastructure such as networks or e-commerce software have done well. Dot-coms are almost passe when it comes to IPO performance.

Calico's pedigree also isn't too shabby. Goldman Sachs is the lead underwriter with an assist from Hambrecht & Quist. Kleiner Perkins Caufield & Byers was Calico's venture capital firm and partner Bernard J. Lacroute is on Calico's board.

And then there's Calico's customer list.

Calico counts Best Buy Inc., Cabletron Inc., Cisco Systems Inc., Dell Computer Corp., Gateway Inc., Merrill Lynch and Nortel Networks Ltd. among its main customers. Dell is also acquiring a stake in Calico at the IPO.

The company also has solid marketing arrangements with Silknet Software and Vignette. In addition, Calico is in talks with Andersen Consulting about a marketing alliance. Andersen Consulting is also interested in buying a stake in Calico at the IPO.

Those relationships make Calico among the most likely to make a big IPO splash, according to David Menlow of the IPO Financial Network, a research firm. "Calico has all the buzz phrases," said Menlow. "They have our highest ranking."

Calico's "eSales Suite" gives companies customized information and flags potential hiccups in the sales process. It also supports multiple sales channels. Dell uses Calico to configure enterprise sales and Nortel hooks up with customers with the software.

Menlow also likes Calico's revenue growth.

For the year ending March 31, the company reported sales of $21.4 million and a loss of $15.2 million. In 1998, Calico reported sales of $11.8 million and a loss of $5.5 million. For the quarter ending June 30, the company had sales of $7.4 million and a loss of $4.7 million. Calico said its sales are evenly split between services and licensing.

But despite the pedigree and partnerships, Calico faces some risks. It could be lumped in as yet another e-commerce software provider and isn't profitable.

Menlow, however, is confident Calico can differentiate itself from the pack. "You can't ignore the growth," said Menlow. "And the net (income) will come."