Start of IPO Auction
NetSuite Inc., the on-demand business-management software provider controlled by Oracle Chief Executive Larry Ellison, said Monday that the auction for its proposed initial public offering of common stock has begun. NetSuite is conducting the offering as a modified Dutch auction.
NetSuite is offering 6.2 million common shares in the offering. In previous Securities and Exchange Commission filings, NetSuite said the IPO is expected to price between $13 and $16 each.
Based on the anticipated price range, NetSuite would have a market capitalization of $773.6 million to $952.2 million. Assuming an offering price of $14.50 per share, the company expects to raise net proceeds of about $80.9 million from the IPO, after fees and expenses.
NetSuite plans to use the net proceeds to repay the outstanding $8 million balance on the company’s secured line of credit with its controlling shareholder Tako Ventures LLC. NetSuite said it may also use some of the proceeds to make acquisitions.
The underwriters have an option to buy up to 930,000 additional shares from NetSuite and a group of selling stockholders, including Chief Executive Zachary Nelson and Chairman and Chief Technology Officer Evan M. Goldberg. Goldberg, a former Oracle employee, started the company in 1998 with Ellison’s help.