NetSuite IPO Ready for Takeoff

NEW YORK, Dec 19 (Reuters) – NetSuite, a software company controlled by Oracle Chief Executive Larry Ellison, on Wednesday raised $161 million with an initial public offering that priced far higher than expectations.

About 6.2 million shares sold for $26 apiece, according to an underwriter.

That price was double the low end of an initial forecast range of $13 to $16, and $4 a share higher than the top of the final forecast of $19 to $22 on Wednesday.

Underwriters, led by Credit Suisse and with W.R. Hambrecht as co-manager, have the option to purchase an additional 930,000 shares to cover overallotments.

If the “greenshoe” option is exercised, NetSuite will have raised about $185 million. Its market capitalization is about $1.5 billion, based on its IPO price. About 10 percent of the company’s outstanding shares are being floated in the public offering.

NetSuite, which will remain majority-owned by Ellison after the offering, plans to use the proceeds to pay down a line of credit from an Ellison-controlled company, which had a balance of $8 million as of Sept. 30, and for capital expenditures, including a second data center.

The San Mateo, California-based company, which targets its Web-based software products at small and mid-sized businesses, has been approved to list its shares on the New York Stock Exchange under the symbol “N”. Trading is expected to begin on Thursday.

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