BackOffice Associates LLC, a provider of data-management software and services, bought out its founders today as an early step toward holding an initial public offering, said Chief Executive Officer David Booth.
The South Harwich, Massachusetts-based company, which is backed by Goldman Sachs Group Inc., bought out founders Tom and Patricia Kennedy today for an undisclosed sum, obtained through a loan from Royal Bank of Scotland Group Plc, Booth said in an interview. The buyback leaves Goldman Sachs with controlling interest in the company, which is also owned by management and employees, he said.
The buyout brings BackOffice closer to its goal of going public in 12 to 18 months, according to Booth. Web-data analysis provider Splunk Inc. has surged 73 percent since it went public in April, while Workday Inc., a maker of human resource applications, has almost doubled since its October debut, reflecting robust investor demand for software companies that cater to business.
“The market is not as vibrant as it was two years ago, but there’s still a lot of interest in quality firms,” Booth said. “We now have a simplified ownership structure. It will help accelerate the continued move toward going public.”
BackOffice is discussing hiring Goldman Sachs, as well as other banks, to handle its IPO, Booth said. The company plans to use proceeds to pay back the new loan, as well as to expand globally, particularly by adding staff in Latin America, Booth said.
The global market for data management software will grow 21 percent to $1.9 billion this year, according to estimates by researcher Gartner Inc. Other companies competing for this market include Informatica Corp., Talend Inc., Utopia Inc. and International Business Machines Corp. BackOffice recently added to its lineup by becoming a reseller for products from software maker SAP AG.
BackOffice is “highly” profitable, and has annual sales of $100 million to $200 million, Booth said in May. Revenue growth is in double-digits, he said then.