GRACE LEONG - Daily Herald | Posted: Monday, June 12, 2006 11:00 pm
Omniture Inc. set its proposed initial public offering at 10.7 million shares at an estimated price range of between $7.50 and $9 a share, according to a statement Friday.
In what's called the red herring, or preliminary offering statement filed with the U.S. Securities and Exchange Commission on Friday, the Web analytics company in Orem proposed to sell 8.7 million shares, while stockholders are selling an additional 2 million shares.
The company said in the filing it expects to receive about $64.3 million in net proceeds, based on an expected IPO price of $8.25 a share after deducting estimated underwriting discounts and commissions and IPO expenses.
Omniture was also approved to list its stock on Nasdaq under the symbol "OMTR."
The company first announced plans to file an IPO to sell up to $120 million in common stock in April. A launch date for the IPO has not been set.
Omniture, which develops software that allows customers to collect and analyze information generated by their Web sites, has more than doubled its revenue every year since 2002. The company, which is benefiting from a growing emphasis by corporations to measure the effectiveness of their Web sites, includes America Online Inc., Apple Computer Inc., Microsoft Corp. and eBay Inc. among its customers.
For the three months ended March 31, Omniture's net losses widened to $3.4 million, or 24 cents loss per share, from net losses of $2.7 million, or 20 cents loss per share a year ago.
Morgan Stanley, Credit Suisse, Deutsche Bank Securities and JPMorgan are underwriting the IPO. The underwriters will have the option to buy an additional 1.6 million shares to cover over-allotments, or oversubscriptions for the shares, the filing said.
If the underwriters' over-allotment option is exercised in full, the company said its net proceeds will be about $76.6 million.
Omniture says the proceeds will be used to pay a $4 million license fee and for general corporate purposes, including expanding its sales and marketing and software engineering staff and services, investments in its network support infrastructure and expanding its service offerings.
The proceeds may also be used for the acquisitions of complementary businesses, technologies or other assets, the company said.
Typically, the red herring -- which lists the expected price range, expected number of shares issued and other financial disclosures -- is used to determine the buying interest of institutional investors in the company and the price they're willing to pay for the stock, said Sam Gardiner, a partner with Salt Lake City-based Dorsey & Whitney and an IPO specialist.
"Once the registration statement becomes effective, the company and its underwriters will agree on a price, and then close on the transaction," Gardiner said. "The underwriters will then buy the shares directly from Omniture and sell them to a syndicate group or institutional investors or brokers. Once the IPO is launched and the shares start trading on the open market, the public can then get in."
In Omniture's case, Gardiner notes its underwriters have proposed to offer an unspecified portion of stock directly to the public at the proposed IPO price and also a portion to the dealers at an unspecified discount to the IPO price.
"That's interesting because the public isn't usually allowed to buy directly from the underwriters," he said.
This story appeared in The Daily Herald on page D6.