While business software can be highly lucrative, it's tough to build critical mass. Look at RedPrairie. The company got its start about 35 years ago. But it is not until now that the company has filed to go public. The offering should hit the markets in the first quarter of next year.
The main focus for RedPrairie is helping companies boost productivity, such as with sophisticated systems to forecast consumer demand. This is done by improving visibility on logistics, inventory and personnel. It also helps that RedPrairie has extensive domain expertise in complex areas like international business and regulatory requirements.
As a sign of the power of its technologies, RedPrairie has amassed a customer base of more than 34,000, which is quite diverse and spans more than 40 countries. Customers include four of the five top consumer products companies, eight of the top 15 food/drug retailers and three of the top five petroleum companies.
No doubt, RedPrairie has posted strong financials, despite the recession. Last year, revenues came to $292.9 million and EBITDA was $60.3 million.
As a public company, RedPrairie will be in a nice position to bulk up with acquisitions. Although, it would not be surprising that the company will eventually be sold to a larger software player, like Oracle (ORCL).
The lead underwriters on the IPO include BofA Merrill Lynch (BAC) and Credit Suisse (CS).
Tom Taulli is the author of various books, including The Complete M&A Handbook
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