Globoforce postpones IPO

Globoforce Group PLC pulled its planned initial public offering late Thursday, bucking a mostly warm reception for IPOs this week.

The Dublin-based business software firm withdrew its IPO paperwork in a regulatory filing dated March 20. Chief Executive Eric Mosley said in a statement late Thursday the company would defer its debut "until market conditions are more favorable."

The withdrawal came after the company slashed its estimate for the proceeds it expected to raise early Thursday, a sign of tepid investor demand during its effort to price the deal. A spokeswoman declined to give additional details on the decision to pull the deal.

Globoforce provides cloud-based software that employers use to recognize workers for achievement, such as awards that can be cashed in at a network of e-commerce sites. The company receives a fee whenever those rewards are redeemed and reported revenues of $187 million last year, and a net loss of $6.5 million.

Through online platforms like Globoforce, firms encourage workers to give each other constant feedback.

Earlier in the week Globoforce said it was looking to raise up to $79 million through the sale of 4.4 million shares at up to $18 each.

Then, the company scaled that back, saying Thursday it would try to sell only 3.8 million shares, at a lower price range, of up to $15 a piece.

Late Thursday evening Globoforce announced it had opted to postpone the IPO “until market conditions are more favorable.” Company executives declined to be interviewed Friday.

Paylocity (PCTY) began trading on the NASDAQ on 19 March 2014

Paylocity (PCTY) late Tuesday announced it sold 7.045 million shares at $17 each, above the expected $14-$16 range. The company raised $119.8 million in the its IPO. The cloud-based payroll software maker had a market cap of roughly $877 million before it began trading Wednesday.

Paylocity is a cloud-based provider of payroll and human capital services software designed to help companies better manage their workforce.

The initial public offering seeks to raise $100 million by selling 6.7 million shares at 14 to 16 a share. At the midpoint, the company would have a market value of $765 million.

Its competitors include Workday (WDAY), Cornerstone OnDemand (CSOD), Paychex (PAYX) and Automatic Data Processing (ADP). Of these, Workday is the most recent IPO. Workday went public in October 2012. Priced at 28, shares rose 74% on the first day. Workday stock now trades near 102.
Research firm IPOboutique said its channel checks suggest demand for Paylocity shares is strong, with the new issue being "multiple times oversubscribed."

Paylocity is a cloud-based provider of payroll and human capital service software designed to help companies manage their workforce.

The lead underwriters are Deutsche Bank Securities and BofA Merrill Lynch. The stock will trade on the Nasdaq under the ticker PCTY.

Paylocity reported revenue of $46.3 million in 2013, up 40%, with a net loss in 2013 of $1.55 million.
As of June 30, Paylocity said it had 6,850 customers. It targets organizations with companies that have from 20 to about 1,000 employees.

Two more IPOs are scheduled to begin trading Thursday and also show signs of strong demand, said IPOboutique. One is Q2 Holdings, a provider of online banking services using a software-as-a-service platform. The other is Akebia Therapeutics, a biopharmaceutical company focused on therapies for patients with kidney disease.

The IPO market is moving at a blistering pace with the average price of new issues this year up nearly 40% from their offering price. And the 45 initial public offerings completed so far is double the year-earlier period, according to Renaissance Capital. The IPOs have raised $7.6 billion, up 28%, as IBD reported.