Workday Inc., a maker of software that helps manage office operations, filed to raise as much as $546 million in its initial public offering.
Workday is offering 22.75 million shares at $21 to $24 each, according to a filing today. Morgan Stanley and Goldman Sachs Group Inc. are leading the sale. Workday plans to list on the New York Stock Exchange under the symbol WDAY.
The company, based in Pleasanton, California, focuses on payroll and human resources delivered through cloud computing, and counts Google Inc. among its customers, according to people familiar with that deal. Workday said it may use some of the proceeds from the IPO to expand its business through acquisitions or investments.
“The demand for this offering prior to the price range was extremely large,” said Scott Sweet, senior managing partner at IPO Boutique. “The demand for Workday is reminiscent of demand for Palo Alto Networks. The investing public has been just waiting for the terms.”
Workday was founded in 2005 by co-Chief Executive Officers Dave Duffield and Aneel Bhusri, who both previously worked at HR-software pioneer PeopleSoft Inc.
The company’s market value will be $3.6 billion at $22.50 per share, the midpoint of its price range with a total of 160.3 million shares outstanding.
Revenue for the six months ended July 31, 2012, more than doubled to $119.5 million, compared with $54.8 million for the same period a year earlier, according to the filing. The company posted a net loss of $46.9 million in the period that widened from $36.3 million.
Companies specializing in cloud-based software have performed well in IPOs this year, Sweet said. Shares of Guidewire Software Inc., a developer of software for insurance companies, had more than doubled since its January 24 IPO as of Sept. 28. Demandware Inc., an e-commerce software provider, had surged 98 percent since its March 14 IPO.
Workday competes with companies such as Oracle Corp. and Salesforce.com Inc., which will be watching the company closely, Sweet said.
“A lot of Workday’s reasons for not being profitable are because of R&D expenses, which will obviviously come down and make them even more attractive to investors and potential suitors,” he said.
Greylock Partners, a Menlo Park, California-based venture firm is the top outside investor in Workday and isn’t selling shares in the IPO, according to the filing.