Appian Inc. to break Greater Washington companies’ IPO fast
The tech industry is growing and many companies are growing along with it. Take the software for enterprises sector for instance. The sector was worth billions according to market research reports in 2016 and has a CAGR of 14.2%. If the trend holds, the sector will be worth $13 billion by 2021. This very sustainable market growth potential, along with the lucrative returns companies in the market are likely to have, have drawn many companies into this bracket, among them Appian Inc.
Appian Inc. (Pending: APPN) is a B2B tech company that employs low code software to help enterprises organize their data for easier business management. In short, these guys teach you how to write code so you can make your own apps. The company was formed in 1999 by Matthew Calkins, who currently acts as Appian’s CEO and is the majority shareholder in the company. Appian’s IPO will be the first issuance in 2017 from a company based in the Greater Washington region.
According to the company’s amended statement on the IPO filing, Appian plans to sell 6.25 million of its common Class A shares at the range of between $11 and $13 per share. With this pricing, Appian will get $67.6 million in IPO proceeds from selling shares to the public at the midpoint and $78.1 million if the underwriters exercise their overallotment option. Both these figures are below the previously estimated IPO size of $86.25 million. Appian plans to list on the NASDAQ stock market. The lead underwriters that the company chose for the deal are Morgan Stanley, Goldman Sachs, and Barclays Capital Inc., with Cowen & Co., Pacific Crest Securities and Canaccord Genuity Inc. acting as co-managers.
Calkins had hinted at an IPO back in 2016. back then he explained that the company could not launch the IPO because the IPO market was not conducive for a medium-sized APPAC firm issuance. So what changed between that period and this one?
For one the 2017 IPO climate got an upgrade. In the first quarter of 2017 alone, over 40 companies have gone public and most of them successfully. Calkins stated that the company had been ‘healthy’ in 2016. Well, in 2017 the figures show that Appian is doing even better. In 2014 Appian’s revenue totaled $89 million while in 2015 it was $112 million. Last year the company’s revenue was even higher, reaching an all-time high of $132.9 million. With these numbers working for the company, Appian is more likely to join the successful issuances bracket now than it would have been in 2016.
One other reason Appian will just sell off its stock in 2017 is that Appian wants to expanding its business this year. To do that, the firm has to avoid further interest cuts by paying off its debt. Appian will also need a fresh influx of cash to widen and run its area of operation and develop more sophisticated software to compete favorably in the tech market. and don’t forget that Appian has to pay off dividends to its shareholders and purchase options for its employees. Only an IPO can infuse Appian with enough cashflow to achieve all these goals.