Compuware planning $1B Covisint IPO
Published October 30th, 2007
Compuware Corp. hopes to raise at least $1 billion in an initial public offering of its Compuware Covisint subsidiary and has hired Morgan Stanley, the New York-based investment banker, to study the IPO’s feasibility.
Compuware already has conducted an internal study of the possible IPO of its successful business unit and hopes to spin out the company in the next year, according to Covisint President and COO Bob Paul.
“The coolest thing coming out of this story is that in the next six to 12 months, we could have a high-tech IPO that doesn’t come out of Silicon Valley,†Paul said.
Paul said Compuware would retain at least a 50 percent share in the company. He said retaining some ownership would allow shareholders to benefit from the revenue generated by the IPO while retaining the possibility that Covisint’s performance in the future would boost Compuware’s share price.
“We’ll get some outside advice. They may say, ‘Don’t do it,’ †Paul said. “But there are a lot of variables that feel really good.â€
When Covisint — which offers secure Web-based exchange of data and business transactions to large companies, government agencies and health care organizations — was bought by Compuware in 2004, it had annual revenue of $11.2 million.
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