Finally, Some IPOs for 2012!

Two cloud deals and a stem-cell-focused biotech are on deck

By Tom Taulli, InvestorPlace Writer & IPO Playbook Editor

The IPO market has gotten off to a sluggish start this year. Last week, we saw the year’s first public offering — and it was a bit of a dud. Renewable Energy Group (NASDAQ:REGI), a biodiesel producer, priced its shares at $10, which was below the $13-to-$15 range. So far today, the shares are trading at $9.50.

Hopefully, the upcoming week will offer better results for investors. On deck are three companies that plan to launch an IPO:

Guidewire Software

Guidewire has developed a cloud-based system that helps manage the transactions of property and casualty insurers. It covers a broad range of functions, such as billing, underwriting and claims.

For fiscal years 2010 to 2011, revenues went from $144.7 million to $172.5 million. During these two years, the company posted net income of $15.5 million and $35.6 million, respectively. It has 103 customers, including Tokio Marine & Nichido Fire Insurance (Tokyo Marine Holdings, PINK:TKOMY) and Nationwide Mutual Insurance.

Guidewire plans to issue 7.5 million shares at a price range of $10 to $12. Lead underwriters include J.P. Morgan (NYSE:JPM), Deutsche Bank Securities (NYSE:DB) and Citi (NYSE:C).


This is another cloud play. But the focus of IntelePeer is to help companies — such as Sprint (NYSE:S) and Qwest Communications — provide more value-added services. These include video and other rich-media applications.

For the first nine months ended September 30, 2011, revenues came to $106.2 million, up from $80.4 million in the same period a year ago. But there was a net loss of $9.6 million. What’s more, IntelePeer has heavy customer concentration: Two clients account for 33% of overall revenues.

IntelePeer plans to issue 7.5 million shares at a range of $9 to $11. Lead underwriters include J.P. Morgan, Deutsche Bank Securities and Barclays Capital (NYSE:BCS).


This biotech operator is developing drugs that target cancer stem cells. The science is based on discoveries by the company’s co-founders, which include PhDs Robert Weinberg, Eric Lander and Piyush Gupta. They believe Verastem represents the next generation of oncology therapeutics.

The company is still in the development stage, and it could easily take many years — if ever — to get its drugs to market. But the CEO is impressive. Christoph Westphal, who has an MD and a PhD, has  co-founded several biotech companies, one of which was sold to GlaxoSmithKline (NYSE:GSK).

Verastem intends to sell 4.5 million shares at a range of $9 to $11. Lead underwriters include UBS Investment Bank (NYSE:UBS) and Leerink Swann.

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.

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