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Versata and Prime Response price IPOs above range

Versata Inc (Nasadaq: VATA), whose software helps businesses tailor e-business applications to their needs, priced shares well above their upwardly revised range at $24 a share for its IPO Friday.

The deal, underwritten by Thomas Weisel Partners, had estimated the 3.85 million shares to price between $19 and $21 a share, up from an original range of $12-$14.

Like most companies going public, Versata's losses outpace gains. The company had a net loss of $21.8 million on revenue of $12.6 million for 1999, compared to a net loss of $8.1 million on revenue of $3.9 million in 1998.

The majority of Versata's revenue comes from software licensing; revenue from its E-Business Automation System was 53.5 percent of total revenue in 1999. The balance was derived from related services.

Versata recently signed a deal to co-brand an integrated product with IBM (NYSE: IBM), which it said may increase competitive pressure. Although the company will receive license fees from IBM, the co-branding of its E-Business Automation System with IBM's WebSphere Application Server Advanced Edition will likely result in its competing with IBM.

Versata also said consolidation in the application server market around major software suppliers such as BEA Systems (Nasdaq: BEAS), IBM, Microsoft (Nasdaq: MSFT), Oracle (Nasdaq: ORCL) and Sun Microsystems (Nasdaq: SUNW) could create new competitive forces.

Versata also competes with vendors of Web integrated development environments such as Bluestone (Nasdaq: BLSW) and SilverStream Software (Nasdaq: SSSW).

  • Another software offering, Prime Response (Nasdaq: PRME) priced 3.5 million shares at $18, above their upwardly revised range of $13 to $15 a share. The original price range had been $11 to $13 each.

    The company, which makes software for managing Internet and traditional marketing campaigns, is half-owned by VC firm General Atlantic Partners. Prime Response's founder and chief technology officer, James Carling, owns another 25 percent.

    Prime Response's net loss almost equaled net revenue for 1999; the company lost $20.4 million over the 12 month period, on revenue for of $20.5 million. Net loss for 1998 was 14.6 million on revenue of $16.5 million.

    The company's biggest customers include British Airways, Dell Computer (NYSE: DELL), and Deutsche Bank; nearly three-quarters of its sales come from outside the US.

    From the proceeds of its IPO, about $10.4 million will go to General Atlantic Partners. Another $4.3 million will be diverted from the company's development and general corporate purposes to pay Kite Limited, one of its stockholders.

    Prime Response competes with vendors of internet-enabled marketing software, including E.piphany (Nasdaq: EPNY), Annuncio, Market First and Rubric; vendors of inbound e-mail management systems, including eGain (Nasdaq: EGAN), Kana (Nasdaq: KANA) and Mustang.com (Nasdaq: MSTG) and vendors of outbound e-mail management systems, including Click Action (Nasdaq: CLAC), Exactis (Nasdaq: XACT) and Match Logic, which was bought by Excite@Home (Nasdaq: ATHM).

    Robertson, Stephens & Company is the deal's lead underwriter; Dain Rauscher Wessels and SG Cowen are co-managers.