Hortonworks Inc., a startup that sells services and support for the Hadoop free data-analysis technology, raised $100 million in an initial public offering, pricing an increased number of shares above the marketed range.
Hortonworks sold 6.25 million shares for $16 apiece, according to data compiled by Bloomberg, after offering 6 million for $12 to $14. That values the Palo Alto, California-based company at $665 million, according to the data. The shares will start trading on the Nasdaq Stock Market under the symbol HDP.
Hortonworks leads a pack of companies seeking to commercialize Hadoop, free software for storing, analyzing and managing large amounts of data, which was developed at Yahoo! Inc. in the mid-2000s to help the Web portal compete with Google Inc. Hortonworks was spun out of Yahoo in 2011 by venture capital firm Benchmark and Yahoo. Its founding team included many of the people who developed Hadoop, except original creator Doug Cutting, who works at Cloudera Inc.
The IPO price values Hortonworks at about 60 times sales for its 2013 fiscal year, which ended in April 2013, compared with 2.06 for International Business Machines Corp. and 4.97 for Oracle Corp., according to data compiled by Bloomberg. Hortonworks names these public companies, as well as private firms Cloudera, MapR Technologies Inc. and EMC Corp. unit Pivotal Software, as major competitors in its prospectus. By comparison, Red Hat Inc., another publicly traded open-source technology company, trades at a sales multiple of 7.3.
Goldman Sachs Group Inc., Credit Suisse Group AG and RBC Capital Markets LLC are managing Hortonworks offering. In March, the company was valued at more than $1 billion in a $150 million funding round from investors including BlackRock Inc. and Passport Capital LLC.
Hortonworks in November became the first Hadoop company to file for an IPO, ahead of MapR and Cloudera. Sales in the year that ended in April 2013 rose to $11 million from $1.6 million a year earlier, while Hortonworks net loss widened to $36.6 million from $11.5 million, according to filings.
The market for Hadoop products, software and services is projected to reach $50.2 billion in 2020, up from $1.5 billion in 2012, according to a report in March from Allied Market Research.
Yahoo will own 16.8 percent of the companys stock following the IPO, the prospectus shows, followed by 15.8 percent for entities affiliated with Benchmark; 8 percent for Index Ventures and affiliates; 7 percent for Teradata Corp.; and 5 percent for Hewlett-Packard Co.
Hewlett-Packard Chief Technology Officer Martin Fink sits on Hortonworks board. The computer maker invested $50 million in Hortonworks in July after Intel Corp. poured $740 million into Cloudera, giving the chipmaker an 18 percent stake in that firm.
To contact the reporter on this story: Jack Clark in San Francisco at jclark185@bloomberg.net
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Hortonworks Raises $100 Million, Pricing IPO Above Range