USinternetworking increases size, price of IPO issue

Annapolis start-up attracts investors

April 08, 1999|By BLOOMBERG NEWS

WASHINGTON -- USinternetworking Inc., which lets customers use business-management software over the Internet, yesterday raised the size of its initial stock offering by 20 percent, to 6 million shares, to satisfy investor demand.

The Annapolis-based start-up also lifted the price of those shares to $16 to $18 apiece from $11 to $13 established in a previous filing with the U.S. Securities and Exchange Commission.

Increasing the number of shares to be sold and their expected price indicates heightened demand on the part of institutional investors, who generally compose the bulk of purchasers in an initial stock sale.

If shares sell for a median $17 apiece, USinternetworking would raise $94 million after expenses and have an implied market value of $661 million based on 38.9 million shares outstanding after the IPO, according to details from the filing.

When USinternetworking first filed for its IPO last month, the company planned to sell 5 million shares and estimated that it would raise about $54.9 million after expenses.

The software provider would have been valued at $454.8 million, according to details in the previous filing with the SEC.

USinternetworking buys licenses for computer programs that manage sales, finance, and other back-office functions, then provides access to the programs over its own Internet-based network for a monthly fee.

The company plans to use the money raised from the IPO to expand its network and service offerings and to pay dividends on preferred stock held by the company's current investors. Leftover funds may go for debt repayment and possible acquisitions, the filing said.

Christopher McCleary, chairman and chief executive, and Stephen McManus, president, are the co-founders of USinternetworking.

Before joining USinternetworking, McCleary was chairman of Digex Inc. and McManus was U.S. sales director for the telecommunications unit of Data General Corp., the filing said.

Founded last year, the company employs about 450 workers.

Credit Suisse First Boston leads an underwriting team that includes BT Alex. Brown Inc., Legg Mason Wood Walker Inc. and Bear Stearns & Co. Inc. USinternetworking said it has been approved to trade on the Nasdaq stock market under the symbol USIX.

Pub Date: 4/08/99

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