Reuters: Global Markets: Shares of Model N surge 44 percent in debut

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Shares of Model N surge 44 percent in debut Mar 20th 2013, 15:08 By Neha Dimri Wed Mar 20, 2013 11:08am EDT (Reuters) - Model N Inc (MODN.N) shares surged 44 percent in their trading debut on Wednesday, fetching a market value of nearly half-a-billion dollars, as the business software maker's hold on the pharmaceutical market makes it an attractive investment option. The Redwood City, California-based company had priced its initial offering of 6.7 million shares at $15.50 each, raising $103.9 million. "They're very unique ... They've carved out pretty much an impenetrable market position in the life sciences area and they're taking that success pattern into other vertical markets such as technology," said Francis Gaskins, a partner at IPODesktop.com, an IPO research company. Model N provides revenue management software to life science and technology companies to help manage pricing, deals, contracts and rebates. "They are moving more into cloud, which is always of great interest to investors, because that's based more on subscription revenue with additional recurring earnings," Gaskins said. The company, which filed for an IPO in February 2013, counts Johnson & Johnson (JNJ.N), Boston Scientific Corp (BSX.N), Dell Inc (DELL.O) and VMware Inc (VMW.N) as its customers. Model N is backed by Accel-KKR Co LLC, a partnership between private equity firm KKR & Co LP (KKR.N) and venture capitalist firm Accel Partners. The company plans to use the proceeds to invest in research and development. It reported a net loss of $1.3 million for the three months ended December 31. JP Morgan and Deutsche Bank acted as joint book-running managers. Shares of Model N were up at $21.45 on the New York Stock Exchange in morning trade after touching a high of $22.25 at open. About 3.8 million shares changed hands by 1025 ET. (Reporting By Neha Dimri in Bangalore; Editing by Joyjeet Das and Sriraj Kalluvila) Link this Share this Digg this Email Reprints

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