Disastrous Facebook IPO killed Openet's planned Nasdaq offering
Ireland's biggest privately-held tech company cancelled its New York float as contagion from Facebook's disastrous IPO raged, its CEO has said.
Openet, which employs 300 people in Ireland and counts Apple, Oracle and Cisco as customers, had been planning an historic move – the first IPO by an Irish software company since the dotcom bubble popped over a decade ago.
Social media giant Facebook launched the world's biggest tech float debut in May last year – and bombed. Three months later it was worth half its IPO value.
The failure was a reality check for many firms in the tech space planning to list, including Openet.
"We were planning to shoot out in September, but the Facebook thing really tanked the market for us," said CEO Niall Norton. "Plans are ready to go, but we're not pulling trigger right now," he said. The start of next year would be the earliest likely date.
"The market is punishing the hell out of firms that are growing but aren't predictable with revenues, and a turbulent stock price just wouldn't suit us. There's no point in going out in a market that would kill our share price."
He cites the example of listed software firms like Ruckus and Synchronoss, getting kicked around the markets. "They're in the same zone we're at, share price goes up and down 20 to 30 per cent. That's a more exciting rollercoaster than our shareholders would like."
Focus now is on acquisitions, possibly a funding round. It's not in the market to be acquired itself, Norton says, and reports that Oracle was set to buy Openet are unfounded. Revenues are at €100m – significantly up – and the company has recently ploughed €20m into R&D. With a metric of four times revenue, Openet is valued at around €400m.
Norton expects a lot of consolidation among Irish tech companies in the next six to nine months. "Big players like IBM and Intel are eyeing up Irish companies and money is very cheap. I'd expect a lot of buyouts – this is the year that all that takes off."