Benefitfocus is ready for its close-up
The fast-growing Charleston software firm plans to raise more than $100 million in an initial public offering scheduled for Wednesday morning.
The timing of the sale had not been disclosed previously.
Benefitfocus registered its IPO about a month ago and plans to sell 4.5 million shares between $21.50 and $24.50 each.
The company is listing its shares on the Nasdaq Stock Market under the symbol BNFT.
The 13-year-old Daniel Island-based firm makes software tools that employees can use to compare, enroll in and manage their workplace benefits, such as medical insurance. Its primary customers include large businesses and health insurers like Aetna.
The company’s leaders are taking the business public “to increase our financial flexibility, increase our visibility in the marketplace and create a public market for our common stock,” according to a filing with the Securities and Exchange Commission.
Its biggest investor plans to cash in as much as $50 million as part of the IPO.
Goldman Sachs & Co., which owns two-thirds of Benefitfocus, plans to sell 1.5 million shares and cut its stake to about 51 percent. That scenario would raise about $34.5 million at the anticipated mid-range IPO price of $23 a share. Goldman Sachs also has an option to sell an extra 675,000 shares for about $15.5 million under certain conditions.
The New York-based bank invested nearly $106 million in Benefitfocus in January 2007 through various affiliates.
None of Goldman Sachs’ stock proceeds would go to the software firm. Instead, Benefitfocus expects to raise about $61 million after expenses by selling 3 million shares in the IPO.
The company said it expects to use the money “for working capital purposes and other general corporate purposes, including executing our growth strategy, developing new products and services, and funding additional capital expenditures, potential acquisitions and investments.”
Benefitfocus hasn’t turned a profit in the last three years, with losses totaling about $32 million since 2010, the IPO filing showed. Sales last year jumped 19 percent from 2011 to $81.7 million. Benefitfocus reported a net loss of $15 million on $48 million in revenue for the first half of 2013.
The company has 800 employees at its Daniel Island campus and at office in the Upstate, Oklahoma and San Francisco.
Contact John McDermott at 937-5572