September 6, 2012, 2:13 PM

SPS Commerce seeks $53.6 million in a stock offering

The provider of web-enabled supply chain technology eyes acquisitions.

Lead Photo

SPS Commerce Inc., a provider of web-based, on-demand supply chain management software for retailers and their suppliers, is seeking to raise $53.6 million through a public offering of stock, the company said today.

SPS says it plans to use the proceeds from the stock offering to pay off debt and to raise working capital for general purposes including possible acquisitions in the supply chain technology industry. It plans to offer 1.6 million shares of common stock at $33.50 per share, for a total value of $53.6 million. The company was trading today at about $34 on the Nasdaq stock exchange.

The company’s technology offerings for retailers cover such areas as inventory management, fulfillment of e-commerce orders, and collaborating with merchandise suppliers to plan merchandise based on forecasts of retail sales. Clients include Best Buy Co. Inc., supermarket chain Winn-Dixie Stores Inc. and multichannel sporting goods retailer Scheels. Best Buy is No.11 in the Internet Retailer Top 500.

Despite the dim records of recent stock offerings by e-commerce companies like Groupon and Facebook, which have seen their stock prices steadily decline, the strength of the business-to-business market served by SPS bodes well for the company’s prospects, says Nikki Baird, managing partner of research and advisory firm Retail Systems Research LLC. “Retailers consistently rate supply chain visibility as one of their biggest challenges, and if anything the challenge has grown over time,” she says. “So the types of solutions SPS provides still seem to be in high demand.”

The lead underwriter for the stock offering is investment management firm Stifel Nicolaus Weise. Also participating are investment firms William Blair & Co., JMP Securities and Needham & Co. as lead managers, and Canaccord Genuity, Craig-Hallum Capital Group and Northland Capital Markets as co-managers.

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