IPO Surpasses Expectations For Payroll Firm Ceridian

29. April 2018.








The latest payroll company to go public had a promising debut last week on the New York Stock Exchange, according to reports in StarTribune.

Ceridian Holdings, the owner of human capital management software Dayforce, completed what the publication said was the largest initial public offering (IPO) in the history of its home state of Minnesota, surpassing expectations when it closed at $22 a share. Analyst estimates had predicted between $19 and $21 per share.

Altogether, the company raised $462 million with its float, beyond its own previous estimates of $400 million. Private equity firm Thomas H. Lee will own 51 percent of the shares, reports in Bloomberg said, with investment firm Cannae Holdings acquiring a 27 percent stake.

Shares were up as much as 42 percent for the company, reports said.

“It’s a testament to the transformation story our company has gone through,” said Ceridian President and Chief Operating Officer Paul Elliott in a statement.

According to reports, Ceridian sold 21 million shares. Reports said the firm plans to use the funds raised to refinance long-term debt and for “general corporate purpose.”

“We feel this really positions our balance sheet for the next level of growth,” added Elliott.

The company saw $750.5 million in total revenues in 2017, up 6.6 percent from 2016; its net losses hit $10.5 million last year, compared to $93 million in losses recorded in 2016.

Ceridian is the latest in a series of payroll companies going public. Last December, Australia’s Ascender announced plans to float on the Australian Securities Exchange (ASX) to raise $76.6 million, while earlier this month, PayGroup, based in Singapore, revealed plans to raise $6.5 million on the ASX too.

Though Ceridian’s IPO is the largest of the group, its float is greatly eclipsed by other planned IPOs in the FinTech market this year. Reports surfaced only weeks ago that Netherlands-based payments processing company Adyen could boost its valuation as high as $11 billion.

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