BOSTON – Breakaway Solutions Inc., a provider of e-business solutions, went public October 6, offering 3 million shares at $14 apiece. The company’s stock priced well above its $10 to $12 filing range.
Underwritten by Morgan Stanley Dean Witter & Co., Lehman Brothers and Deutsche Banc Alex. Brown, the initial public offering left 16.7 million shares outstanding.
There were no selling shareholders. Internet Capital Group Inc. was a venture backer.
Breakaway enables growing enterprises to capitalize on the power of the Internet by providing them with application hosting and professional services. The company analyzes a client’s business and recommends Internet technology to enhance its operations.
Breakaway plans to use the expected $37.8 million generated from the IPO to increase visibility in the marketplace, facilitate future access to public markets, provide liquidity to existing stockholders and enhance its ability to use common stock as a means of attracting and retaining key employees. The company will use the proceeds for working capital and for general corporate purposes, including possible acquisitions of complementary businesses, products and technologies.
Breakaway was profitable in its first two years of operation, earning $618,000 in 1996 and $1.1 million in 1997, but then lost $575,000 in 1998.
Christopher Greendale, a managing director at Internet Capital, joined the company’s board of directors in January. Walter Buckley III, co-founder, president, chief executive officer and director at Internet Capital, also joined in January.
Breakaway Solutions – Selected Financial
(in thousands, except per share data)
Year Ended December 31 Six Months Ended June 30
1996 1997 1998 1998 1999
Total revenue 3,462 6,118 10,018 4,729 7,563
Net income 618 1,074 -575 357 -2,518
Net income per share 0.09 0.17 -0.09 0.06 -0.55