In a move that defies shaky market conditions and bolsters the ASP industry Lawson Software the St. Paul Minn.-based enterprise ASP today announced the initial public offering of 14,000,000 shares of its common stock at a price of $14.00 per share.
The company offered 13,675,000 shares and selling shareholders offered 325,000 shares. The common stock began trading on the Nasdaq National Market System under the symbol ‘LWSN’
“We’ve been preparing the IPO for the past six months,” says Bob Barbieri, Lawson Softwares CFO. “We were in no rush, but had been talking strategically about going public and what it would add to our financial capabilities, branding and future business opportunities.”
The firm, best described as a midrange Enterprise Resource Planning (ERP) vendor for services industries, has become a dominant player in the market since it began in 1975. Today, Lawson has more than 1,800 customers and over 2,000 employees worldwide.
Barbieri says the timing for the IPO was deemed right by Lawson’s underwriters that indicated there was a strong appetite building in the investment community for this type of firm.
“We tested the market to see when it would first get some positive movement. Since we never intended specific timing or were in need of urgent funding need we always had flexibility,” he explains.
Lawson’s software, which automates business processes such as financial management, human resources, professional services automation, procurement, distribution and customer relationship management solutions, is offered as a service through the firm’s partnerships with ASPs.
When asked if the IPO would mean a transition to offering hosted applications, as is being adopted by other larger enterprise Independent Software Vendors (ISVs), Barbieri says that although the firm’s technology allows the provision of hosted applications through ASPs, the majority of its offering is direct sale to customers and it is likely to remain this way in the short-term:
“Right now, I don’t think the ASP model has the traction and momentum that it may in the future. When it becomes more predominant, we will continue working with our partners to satisfy their needs in a hosted situation,” he says.
“It takes a while for new technologies to so-called ‘cross the chasm’ to being a good idea on a broad scale. It’s up to our partners to primarily push hosted applications and we stand ready to satisfy that upon their success,” he continues.
Barbieri argues that the firm’s success, it has grown almost 30 percent annually in the last five years, is a result of the five vertical segments is serves. These include; healthcare, professional services, financial services, retails and public sector,
“These sectors have not been serviced adequately in the past, so have been the quickest to adopt our software solutions.”
In particular, he points to health and public sector customers because they are not tied to specific economic movement.
“We are feeling very positive, which is due to our vertical software sector approach and have a good customer appetite for our solutions even in a tough overall economy,” he says.
Lawson, together with selling shareholders, have granted the underwriters an option to purchase an additional 2,100,000 shares to cover over-allotments, if any.
Lehman Brothers is acting as sole bookrunner and co-lead manager and J.P. Morgan Securities is acting as co-lead manager of the offering. U.S. Bancorp Piper Jaffray and Fidelity Capital Markets are acting as co-managers.
