The IPO Buzz: KKR-Backed OneStream (OS) Prices IPO at $20.00 – Above Range

KKR-backed OneStream (OS) priced its IPO at $20.00 – $1.00 above the top of its range – and sold 24.5 million shares – the number of shares in the prospectus – to raise $490 million on Tuesday night, July 23, 2024. OneStream’s AI-enabled software platform caters to CFOs and other financial services professionals. OneStream’s stock is expected to start trading on Wednesday, July 24, 2024, on the NASDAQ. Morgan Stanley, J.P. Morgan and KKR led the team of joint book-runners. KKR disclosed a conflict of interest in the prospectus, due to its dual roles as a leading underwriter of the IPO and a selling shareholder. BofA Securities, Citigroup and Guggenheim Securities rounded out the  joint book-running team. Of the 24.5 million shares in the IPO, OneStream offered 18.05 million shares and the selling shareholders offered 6.45 million shares. KKR offered 4.96 million shares –  representing about 77 percent of the shares offered by the selling shareholders. Cornerstone investors – certain funds and accounts advised or sub-advised by T. Rowe Price Investment Management Inc. – had indicated an interest in buying up to 15 percent of the stock in the IPO. These shares will not be subject to a lock-up agreement, the prospectus says. IPO investors focused on OneStream’s software revenue growth of 40 percent in the past year. OneStream has a history of net losses and accumulated deficits, according to the prospectus. But the Street heard that IPO investors were keeping their eyes on the revenue growth – and looking away from the red ink on the bottom line. The company reserved 5 percent of the stock in the IPO for its Directed Share program for directors, officers, certain employees and partners. After the IPO, private equity firm KKR would own a stake representing about 52.2 percent of the voting power of OneStream’s outstanding stock,  the prospectus said. “Empowering the CFO” OneStream, based in the northern Detroit suburb of Birmingham, Michigan, says its AI-enabled software platform – the Digital Finance Cloud – “modernizes and increases the strategic impact of the Office of the CFO.” The company was founded in 2012, when it launched its platform. KKR acquired a majority stake in 2019, the prospectus says. The financial press reported that the 2019 transaction valued OneStream at over $1 billion at the time. “Our vision is to be the operating system for modern Finance by unifying core financial functions and empowering the CFO to become a critical driver of business strategy and execution,” OneStream said in the prospectus. As of Dec. 31, 2023, OneStream had 1,388 customers – up from 1,148 customers on that date in 2022 – an increase of 21 percent, the prospectus said. “We have achieved rapid growth since first launching our platform,” the prospectus says. “For 2022 and 2023, our software revenue was $245.5 million and $343.4 million, respectively, representing year-over-year growth of 40 percent.” OneStream is not profitable. For the 12 months that ended March 31, 2024, OneStream reported a net loss of $10.82 million on revenue of $406.39 million, according to the prospectus. (For more information about these companies, please check the IPO Calendar and the individual IPO Profiles found on IPOScoop.com’s website.) Note: Never trade on proposed symbols. They have been known to change and you might buy something on the OTC Bulletin Board. To see what time the NASDAQ IPOs are expected to trade, please log in to: NASDAQTrader.com then scroll down to IPO Message. Disclosure: Nobody on the IPOScoop.com staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The IPOScoop.com staff does not issue advice, recommendations or opinions. Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums) is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with IPOScoop.com. The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest in the IPO. The information offered is taken from sources we believe to be reliable, but we cannot guarantee the accuracy.