May 20, 2013, 11:55 AM

SLI Systems is going public

The New Zealand-based site search company will start trading May 31.

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Site search software provider SLI Systems Ltd. is raising money through an initial public offering of stock. It began offering 18 million shares at NZ $1.50 (USD $1.22) on May 14 in an auction that will close May 28; SLI shares will begin trading on the New Zealand Exchange Main Board May 31.

SLI expects the IPO will raise NZ $27.0 million (USD $22.0 million), from which SLI will pay out NZ $12.0 million (USD $9.8 million) to earlier investors, it says.

The Christchurch, New Zealand-based company plans to use the proceeds to expand into new markets, grow sales, boost marketing in existing markets and build up its technology suite, says CEO and co-founder Shaun Ryan.

“There is global demand for our services due to the fantastic value they offer to customers,” he says. “We have a strong board and executive management team, a strong and sustainable revenue stream and substantial future growth prospects.”

In addition to selling in New Zealand, SLI provides technology to clients in Australia, the United States and the United Kingdom. Most of the funds will go towards expanding sales and marketing in those regions, Ryan says. However, he adds that SLI also has "a number of very good customers in Brazil and will be putting effort into expanding our customer base there." The company also plans to begin selling in Japan soon, he says.

SLI customers pay a monthly fee to access the vendor’s site search software over the Internet. Besides its site search products, SLI also sells software for merchandising, search engine optimization and multivariate testing. For part of the IPO funds earmarked for product improvements, customers will have a say in what SLI builds, Ryan says. "The close relationship we have with our customers means that many of them are coming up with ideas for products or features they would like from SLI," he says. "We have a history of responding to those requests and continually innovating."

For the fiscal year ended June 30 2012, SLI had revenueof NZ $15.5 million (USD $12.6 million), it says. For the fiscal year ended June 30, 2013, the company says it expects to report revenue of NZ $19.2 million (USD $15.6 million),  a 23.9% increase. By June 2014, it expects revenue of NZ $25.9 million (USD $21.1 million), a 34.9% year-over-year increase over revenue projected for the current fiscal year.

In fiscal 2012, SLI reported a net profit of NZ$83,413 (USD $67,990), compared with a loss of  NZ$61,371 (USD $50,024) in fiscal 2011.

SLI ranks No. 6 among site search vendors in Internet Retailer’s Leading Vendors to the Top 1000 E-Retailers. 33 e-retailers in the 2013 Top 500 Guide and 24 in the 2012 Second 500 (the 2013 edition is forthcoming) report using SLI for site search.

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