IntelePeer Inc., the developer of cloud technology that helps manage phone calls and e-mail traffic that planned to price its initial public offering today, postponed the IPO because of market conditions.
The San Mateo, California-based company, which helps route traffic for phone companies such as Sprint Nextel Corp., planned to raise as much as $82.5 million selling 7.5 million shares for $9 to $11 apiece, according to a regulatory filing. The unprofitable company planned to use proceeds from the IPO to repay loans and for possible acquisitions and investments.
“IntelePeer has decided not to proceed with our IPO,” Chief Executive Officer Frank Fawzi said today in a statement. “The momentum in our business remains solid and our customer base continues to expand. Our investors and management team remain committed to the company and the well-defined strategy we have put in place to capitalize on the communication industry’s shift from legacy networks.”
IntelePeer’s technology helps connect users of newer smartphones to traditional land lines or older mobile phones. While its revenue has surged more than fivefold since 2006 and totaled $106.2 million in the nine months ended Sept. 30, it shares about 70 percent of those sales with partners. Sales and marketing costs, meanwhile, are rising, and IntelePeer reported annual losses from 2006 through 2010 of $34.5 million.
“If they haven’t made money by now, they should have,” said Francis Gaskins, president of Los Angeles-based IPODesktop.com, which monitors IPOs and doesn’t recommend buying IntelePeer shares.
IntelePeer’s gross margin, or the percentage of sales that remain after the cost of goods sold, is about 29 percent, making it less attractive than more profitable ServiceSource International Inc., which manages contract renewals for customers via a cloud-based platform and went public last year, he said.