IPO Report: Upland Software (UPLD)

Upland Software (UPLD) is a leading provider of cloud-based enterprise work management software. UPLD defines enterprise work management software as software applications that enable organizations to plan, manage and execute projects and work. It is based in Austin, TX,

Ten other companies are scheduled to IPO for the week of Nov. 3, 2014.  The full IPO calendar is available at IPOpremium.

SEC Documents

Manager, Joint-managers: William Blair, Raymond James
Co-managers: Canaccord Genuity, Needham & Company

End of lockup (180 days): Tuesday, May 5, 2015
End of 25-day quiet period: Monday, December 1, 2014

UPLD scheduled a $50 million IPO with a market capitalization of $187 million at a price range midpoint of $13 for Thursday, Nov. 6, 2014 on Nasdaq.

Upland Software IPO Summary

UPLD is a leading provider of cloud-based enterprise work management software. UPLD defines enterprise work management software as software applications that enable organizations to plan, manage and execute projects and work.

Upland Software Valuation

Glossary

Conclusion

Positive, C, 7

Small cloud software co

Rev up 70% for June 6 mos

Loss dropped to -$2.4 for Q3

Deferred rev is 63% of sales

Price to sales of 2.9

Business

UPLD is a leading provider of cloud-based enterprise work management software. UPLD defines enterprise work management software as software applications that enable organizations to plan, manage and execute projects and work.

UPLD’s software applications help organizations better optimize the allocation and utilization of their people, time and money. UPLD provides a family of cloud-based enterprise work management software applications for the information technology, marketing, finance, professional services and process excellence functions within organizations.

UPLD’s software applications address a broad range of enterprise work management needs, from strategic planning to task execution.

The continued growth of an information-based economy driven by technological innovation and globalization is causing a fundamental shift in the way work is done.

These changes have given rise to a large and growing group of knowledge workers who operate in dynamic work environments as part of geographically dispersed and virtual teams. McKinsey estimates that, as of May 2013, there were more than 200 million knowledge workers globally.

UPLD believes that manual processes and legacy on-premise enterprise systems are insufficient to address the needs of the modern work environment. In order for knowledge workers to be successful, they need to interact with intuitive enterprise work systems in a collaborative way, including real-time access at any time, from anywhere and on any device. Today, legacy processes and systems are being disrupted and replaced by cloud-based enterprise work management software that improves visibility, collaboration and productivity.

In response to these changes, UPLD is helping transform how work gets done by providing organizations and their knowledge workers with software applications that better align resources with business objectives and increase visibility, governance, collaboration and responsiveness to changes in the business environment.

This results in increased work capacity, higher productivity and better execution. UPLD’s applications are easy-to-use, highly scalable and offer real-time collaboration for knowledge workers distributed on a local or global scale.

Intellectual Property

UPLD filed applications to register some of its trademarks, including UPLAND, “DO THE RIGHT WORK. DO THE WORK RIGHT” and its Upland Software logo, in the United States and certain other jurisdictions. In addition, as of June 30, 2014, UPLD owned four issued U.S. patents and had four pending applications for U.S. patents.

Competition

UPLD’s primary competitors for each of its enterprise work management applications currently include:

Program and Portfolio Management: Clarity (a division of Computer Associates), Changepoint, Instantis and Planview;             Project Management and Collaboration: Microsoft Project, AtTask and Clarizen; Workflow Automation and Enterprise Content Management: Hyland Software, Laserfiche, OpenText, Perceptive Software (a division of Lexmark), Adobe and Sitecore;  Professional Services Automation: Deltek, Infor, OpenAir (a product of NetSuite) and Replicon; and Financial Management: Apptio, Hewlett Packard’s Information Technology Financial Management Solution and VMware’s Information Technology Business Management Suite.

5% Shareholders pre-IPO

Entities affiliates with Austin Ventures    19.3%

Entities affiliated with Activant Holdings  6.8%

Entities affiliated with ESW Capital LLC 23.9%

John T. McDonald         18.0%

John D. Thornton          19.3%

Steven Sarracino           6.8%                

Dividends

No dividends are planned.

Use of Proceeds

UPLD expects to receive $43 million from its IPO and use it for the following:

$11.5 million of the net proceeds of this offering to repay outstanding and accrued interest under its loan and security agreements with Comerica Bank.

As of June 30, 2014, UPLD had $3.6 million outstanding as revolving loans and $18.9 million as term loans under its loan and security agreements. The revolving loans and term loans bear interest at a floating rate equal to Comerica Bank’s prime rate plus 1.75%. All outstanding revolving loan amounts must be repaid on April 11, 2015. All outstanding principal and interest under the term loan must be repaid on April 11, 2018.