Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Jive IPO Filing Holds Clues to Valuation Mystery

Jive Software, the pre-IPO player in the red-hot social enterprise and collaboration business, amended its S-1 filing with the U.S. Securities and Exchange Commission last night. Among the new revelations are the exchange it has selected for its debut — the Nasdaq — and its four-letter ticker symbol. Think you can guess it? That’s right: JIVE.

The amendment also includes some new financial data. For the quarter ended Sept. 30, Jive reported a $7.6 million loss — which is in line with the year-ago quarter — on sales of $20.8 million; a 69 percent increase year on year. And for the first nine months of the year, its net loss, at $38.1 million, was 83 percent higher than a year ago; sales, at $54.8 million, were up 74 percent from a year ago.

Jive also disclosed how much it paid for OffiSync, the company it acquired in May — the acquisition allows Jive to make more socially aware applications for Microsoft Office. Jive paid $23.3 million for OffiSync, which included the issuance of 78,110 shares of stock worth $600,000, implying at the time that each share of Jive was worth about $7.68. This gives us a clue concerning the paper value of the shares of the company at the time of that deal.

Jive’s two main VC investors own more than half the company: Sequoia Capital owns 36.2 percent, while Kleiner Perkins owns 14.2 percent. Assuming that the $7.68 share price implied by the OffiSync acquisition still holds — which it probably won’t by the time the offering prices — Sequoia’s 16,975,233 shares would be worth $130.4 million, while Kleiner’s would be worth $51 million and change. CTO and co-founder Matt Tucker has a stake that would have been worth more than $54 million at the time of the OffiSync deal. Tony Zingale, the former head of Mercury Interactive, who helmed its sale to Hewlett-Packard and who was brought in to take Jive public, has a stake that would have been worth about $27 million at the time of the OffiSync deal. Again, take those valuations with a grain of salt, because they’re likely out of date by now.

Update: It turns out that, yes, that valuation from May is out of date. In September, Sequoia and Kleiner exercised warrants to buy shares, at $10.37 a share. So that would push Sequoia’s stake to north of $176 million, Kleiner’s to $69 million, Tucker’s to $73 million and Zingale’s to $37 million.

Elsewhere in the filing, we learn that Jive finished the quarter with $72.6 million in cash, and has whittled its long-term debt down to $26 million, down from the $33 million it listed in its initial S-1 filing in August. Much of that debt was taken on to get acquisitions like the OffiSync deal done.

Interestingly, the filing also contains a glance at OffiSync’s books, and it was clearly a tiny company just getting started. Through the middle of May, when the acquisition was concluded, it had booked $205,000 in sales. Assuming a constant run rate, it would have finished the year with about $600,000, meaning Jive paid about 39 times sales. A fair metric? It is, if Jive considered OffiSync’s capabilities a strategic feature, which it clearly did.

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