Textura looks to be the next beneficiary of the resurgent housing environment now that the company — which operates a cloud platform for the construction industry — has filed for an initial public offering.
The company expects to list on NYSE under the symbol of “TXTR,” and the lead underwriters include Credit Suisse (NYSE:CS), William Blair, JMP Securities, Oppenheimer & Co. and Barrington Research.
Textura’s software is a full-fledged system for developers, contractors and subcontractors. Some of the features include construction payment management, electronic signatures, processing of legal documents, review and routing of project submittals, estimates, bidding and risk assessment. It even has the capability to deal with the complicated issues of the environmental certification process.
By being in the cloud, Textura’s system has the advantage of efficiently maintaining data, which can be accessed from web-based computers and mobile devices. It also is ideal for allowing for real-time collaboration with multiple parties. A key to this was a savvy acquisitions strategy, which included the purchase of GradeBeam and Submittal Exchange.
Since inception, Textura’s system has managed more than 12,000 projects with a value over $110 billion. More than 3,000 operators have used the system, including 41 of the 100 largest general contractors in the U.S.
Things look good on the revenue front, with fiscal 2012 sales coming in at $21.7 million, or 260% better than fiscal 2010. Still, losses are significant — Textura finished $18.8 million in the red, which it also did in 2011 — thanks to aggressive investment in its infrastructure, R&D and sales.
Growth is likely to continue for some time, too. There has been little innovation in the construction industry, with a reliance primarily on applications like Microsoft‘s (NASDAQ:MSFT) Excel. However, the founders of Textura — which include top consultants from PricewaterhouseCoopers — saw a huge opportunity to help automate a laborious process. The benefits include not only lower costs but faster project times.
Meanwhile, the construction industry is in the midst of a big rebound, and the long-term trends are positive, such as with continued population growth in the U.S. as well as the need to upgrade deteriorating infrastructure. According to Global Construction Perspectives, the growth in global spending on construction is expected to grow at an annual rate of 5.2% from 2010 to 2020.
The IPO market has picked up on the trend. Some recent hot offerings in the real estate sector include Boise Cascade (NYSE:BCC), up 47% since early February, and Realogy (NYSE:RLGY), which has posted a gain of 66% since coming public in October 2012.
Similarly, the cloud industry has been sizzling, with standout offerings including Workday (NYSE:WDAY), which has doubled in half a year, and ServiceNow (NYSE:NOW), which has risen 95% since its 2012 debut.
In other words, the planets seem to be aligned for Textura success.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities, and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.