Corio Prices IPO as Dell Climbs Aboard

Much-watched ASP startup Corio gained Dell as an investor in April and aims to raise as much as $150 million in its proposed Nasdaq IPO, it emerged on Friday (Jun 9th).

In papers submitted to the US Securities and Exchange Commission (SEC), San Carlos CA-based Corio Inc stated it will sell 10 million shares at a price set in the $11 to $13 range. With 39 million shares currently outstanding, the offering represents about 20% of its equity.

The papers also reveal that the ASP raised $54.5m in a private placement on Apr 20th, when it issued almost 5.5 million shares to a group of twelve investors at a price of $10 each. Half the share placement was taken up by Dell Computer Corp , giving the computer manufacturer a 7.3% stake in the ASP.

The funding for Corio is the latest in a succession of investments in ASPs by Dell – see related ASPnews.com story, Dell courts providers, Apr 7th 2000.

Another recent addition to Corio’s shareholder list is the newly-merged consulting group Cap Gemini Ernst & Young, which owns a 12% stake in the form of warrants issued in connection with an exclusive deal with the ASP first announced in April – see related ASP News story on internetnews.com, Corio Teams with Ernst & Young, Apr 26th 2000.

The new filing has been updated to include financials for the first quarter of 2000. Revenues from application management services – effectively its ASP subscription revenues – totalled $1.1m for the quarter. This was a substantial improvement over the $0.53m subscription revenues in the previous quarter, and exceeded the $0.75m total from this source for the whole of 1999. Other revenues – principally implementation and consultancy – were $4.1m, giving a total of $5.3m for the first quarter.

The net loss on operations for the quarter was $28.5m. The pro forma accounts include a further $20.2m book loss relating to the April placement of stock, which is redeemable at the IPO price.

The revised IPO sum is a big jump up from the $50 million Corio said it was aiming to raise when it lodged the first draft of its registration statement in mid-April – see related ASPnews.com story, Corio files for IPO, Apr 22nd 2000.

The proposed initial public offering would value Corio at $588m based on the $12 midpoint price. Corio will list under the ticker symbol CRIO.