MCLEAN, Va. – Online Resources & Communications Corp., a provider of outsourced e-commerce services for financial institutions, held an initial public offering June 4, offering 3.1 million shares at $14 each, the high end of the company’s $12 to $14 filing range.
J.P. Morgan & Co., U.S. Bancorp Piper Jaffray and Keefe, Bruyette & Woods Inc. underwrote the IPO, which left 10.82 million shares outstanding.
There were no selling shareholders. 21st Century Communications Partners, Dominion Fund IV and Apex Investment Partners II and III were venture backers.
Online Resources lets regional and community financial institutions provide online banking services to their retail customers. The company acts as a hub between banks, customers and other financial institutions by integrating financial data transmitted among them. Online Resources also provides call center support and offers a range of marketing strategies and other services.
Of the $39 million generated by the IPO, $9.5 million will be used to repay debt, $7.4 million to $14.8 million will be used to expand co-marketing programs with existing financial institution clients and the remainder will be used for general corporate purposes.
The company has not been profitable in recent years, losing $11.6 million in 1998 and $11.1 million in 1997.
Barry Fingerhut, a general partner of 21st Century, joined Online Resources’ board of directors in May 1996, followed by Michael Lee, a managing partner of Dominion Ventures, and George Middlemas, a managing general partner of Apex Investment Partners, in June 1997.
Online Resources & Communications – Selected Financial
(in thousands, except per share data)
Year Ended December 31, Three Months Ended March 31,
1996 1997 1998 1998 1999
Total revenue 1,131 2,855 4,326 820 1,504
Net loss -6,976 -11,046 -11,558 -2,423 3,485
Net loss per share -1.86 -3.38 -3.83 -0.87 -1.81