Open Solutions Inc.'s on-again, off-again attempt to do an initial public offering is back on.
The Glastonbury, Conn., company, which sells client/server core banking software, plans to go to the market in May to raise $60 million to fund its ambitious expansion plans. It would be its third attempt at an IPO since it filed a registration statement in summer 1998.
Open Solutions has 130 community banks and thrifts as customers. Revenues rose 9% last year, to $14 million, and the net loss was slashed to $4.7 million, from $45.8 million.
The stock would trade on Nasdaq under the symbol OPEN. Deutsche Banc Alex. Brown, J.P. Morgan & Co., and Prudential Securities' Prudential Volpe Technology unit are to manage the offering.
A stock market slide caused Open Solutions to scrap its first IPO attempt. In late 1998, just days before its second try, it agreed to be bought by HNC Software Inc. The ultimately unsuccessful bid diverted Open Solutions from its IPO plans and resulted in private funding from San Diego-based HNC instead.
On March 1 Open Solutions entered a quiet period and company executives would not talk about the latest IPO try.
Open Solutions raised $20 million in private venture capital funds last month from several large investors, including KeyCorp of Cleveland and $20 billion-asset Webster Financial Corp. of Waterbury, Conn.
Company officials took the investments as a sign that large banks are becoming interested in client/server systems. Such systems, which run on lower-cost platforms like Windows NT and Unix, have mostly been installed at community institutions.
Phoenix International Ltd., which would be Open Solutions' closest publicly traded competitor, has suffered from ongoing problems caused by a sales slowdown related to the year 2000 conversion. The Heathrow, Fla., company has missed earnings expectations the last several quarters and recently announced a downward revision of its previously announced results for the fourth quarter and year that ended Dec. 31. Phoenix's stock closed Thursday at $3.46, down 4 cents. Its 52-week high is $7.
Bill Bradway, an analyst at Meridien Research, said the KeyCorp and Webster investments were "highly positive" developments for Open Solutions.
"A medium-size regional like Webster is within reach as a customer of Open Solutions" in a couple of years, Mr. Bradway said.
Open Solutions' third try for an IPO "may be a charm," Mr. Bradway said. "A lot of it has to do with the general market environment, which goes beyond any one individual company."