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SilkRoad Is Gearing Up for an IPO

The cloud operator should produce a red-hot deal


I’ve interviewed SilkRoad CEO Flip Filipowski, several times because he’s a legend in the software business, having built multibillion-dollar companies like Cullinet and Platinum.

Now it looks like he’ll have another big win with Silkroad.

The company, which is a cloud provider of HR services, is prepping for an IPO — a goal he’s never been shy about in previous talks. According to a report from Reuters, the company has already selected its lead investment bankers, which include JPMorgan Chase (NYSE:JPM) and Piper Jaffray (NYSE:PJC). The deal likely will come in the second half of the year.

Founded in 2003, SilkRoad has raised about $162 million from investors like Intel Capital, Azure Capital Partners and Crosslink Capital.

Last year, Silkroad snagged 185 new customers, marking an increase of 44% over the previous year, and it also enjoyed a 32% increase in bookings. (There are no revenue numbers since the company has not filed an S-1 with the SEC).

Flip is unsurprisingly bullish on the company’s prospects. He said during one of my interviews:

“The capitulation of the legacy players is a clear indication for investors that there will be a transfer of wealth from legacy vendor shareholders to cloud-based technology shareholders. As additional acquisitions follow, the cloud shareholders will be liquefied at very handsome premiums.”

The timing looks ideal for a SilkRoad offering, too.

For one, a variety of cloud companies have pulled off successful offerings, including ServiceNow (NYSE:NOW), which is up 86% since its June IPO, and WorkDay (NYSE:WDAY), which is in an industry similar to SilkRoad’s and has nearly doubled since going public in October.

Also, the cloud sector has been a hotbed of acquisitions. A recent example is Oracle’s (NASDAQ:ORCL) $871 million purchase for Eloqua, which came public in August. The overall return ended up at 108%. SAP (NYSE:SAP) and Microsoft (NASDAQ:MSFT) also have been active, with billion-dollar deals for companies like Yammer and SuccessFactors.

Previous Interviews

If you want to read one of my interviews with Flip, you can check them out here and here.  He always has something interesting to say about what’s happening in the tech world.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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