Last year, cloud computing was definitely rewarding to shareholders. A key driver was the M&A interest. Companies such as Oracle (NASDAQ:ORCL) and SAP (NYSE:SAP) struck multibillion-dollar deals in the space, driving up valuations.
So as the IPO market gets started in 2012, it should be no surprise that investors are enthusiastic about cloud deals. Just look at today’s offering of Guidewire Software (NYSE:GWRE). The company issued 8.85 million shares at $13 each, which was above the $10-to-$12 range. By the end of the trading day, the stock was up 33%.
Guidewire builds software to help insurance companies manage their operations, including claims, underwriting and billing. The industry is in the midst of a major replacement cycle of legacy technologies, which has turned into a huge opportunity for Guidewire.
In fiscal 2011, revenues increased by 19%, to $172 million, and profits came to $35.6 million. Guidewire has 103 customers, including biggies such as Tokio Marine & Nichido Fire Insurance and Mercury & Zurich Financial Services Group. The company also has key partners, including CapGemini Group, Ernst & Young Global, IBM (NYSE:IBM) and PricewaterhouseCoopers.
For more on the company, check out a recent analysis at IPO Playbook. Also, I’ll have a Q&A with Guidewire’s CEO tomorrow.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.
A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.
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