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Aprimo prepares $50 million IPO pitch for Wall Street: Marketing software-maker's sales reach $51.6M

September 17, 2007

Fast-growing local marketing software-maker Aprimo Inc. already has done much of the heavy lifting to ensure its $50 million initial public offering is successful.

Now comes the most grueling part.

Over the last four years, the company nearly quintupled its sales. In 2006, Aprimo turned its first profit. After lining up Morgan Stanley & Co. to serve as lead underwriter, Aprimo on Sept. 10 filed a preliminary prospectus for the IPO with the Securities and Exchange Commission.

Next up: the road show for potential Wall Street investors. Aprimo CEO Bill Godfrey, 39, will have to make his pitch repeatedly, most likely in 30 minutes or less each time.

"Sometimes you're doing up to eight presentations a day, answering the same questions over and over again, until by the end of the day your mouth will barely move," said Don Brown, CEO of locally based communications software-maker Interactive Intelligence Inc. "At the end of the day, you just need a beer."

Brown has been there before. Interactive Intelligence went public in 1999. And Software Artistry Inc. staged a successful IPO in 1995, shortly after Brown stepped down from the company's day-to-day management. IBM Corp.'s Tivoli Systems Inc. division bought Software Artistry in 1997 for $200 million.

Godfrey, who holds an MBA from the University of Notre Dame, got his start under Brown as a Software Artistry sales and marketing executive. In 1998, he cofounded Aprimo, which makes a software package to aid in planning, budgeting and coordinating a company's marketing.

Business functions such as accounting or finance long have been automated. But Aprimo was one of the first firms to successfully do the same for marketing. It now counts as customers major firms such as Bank of America, Cummins, Merrill Lynch and Honda.

Aprimo declined IBJ's request for an interview, saying SEC rules restricted it from providing information beyond what is in the prospectus.

That document shows the company has been on a rapid upward trajectory. Sales have increased from $13.3 million in 2002 to $51.6 million in 2006, and are on track to surpass that total this year. The company now employs 355, up from 211 at the end of 2005.

Along the way, it accumulated a $47.1 million deficit. But the firm, which is backed by private investors and venture capitalists, finally booked a $2.1 million profit last year.

A successful IPO should increase Aprimo's ability to compete against its largest rival, Waltham, Mass.-based marketing software-maker Unica Corp., said Kimberly Collins, research vice president for Stamford, Conn.-based technology analysis firm Gartner Inc. But she said it also intensifies pressure on Aprimo to post strong short-term results.

Unica staged its own IPO in August 2005. That firm posted sales of $82.4 million in its latest fiscal year, up 30 percent from the prior period.

"Going public is a double-edged sword. If you do it well, continue momentum and invest in the company for growth, it's a success," said Collins, a longtime Aprimo analyst.

"If you don't plan for that growth, you probably won't be successful long term. You've got to be able to sustain it. [As a public company], it becomes real clear real quick. And if things start going wrong, you become a ripe acquisition target."

Aprimo would be the area's third publicly traded IT firm. In addition to Interactive Intelligence, the city is home to CTI Group Holdings Inc., a provider of invoice management software.

Local technology leader Mark Hill, one of the earliest investors in Aprimo, said it's gratifying to see a local technology company endure the bursting of the Internet bubble and go on to prosper.

"Bill Godfrey and [Chief Technology Officer] Rob McLaughlin have really built it up," said Hill, who manages the investment firm Collina Ventures.

"It's great for the investment community and the [local] technology community."
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