* Shares open at $31, above IPO price of $17
* Values company at $1.55 bln at day's high
(Add details, analyst comment; updates share movement)
By Neha Dimri
March 19 Shares of online payroll processor
Paylocity Holding Corp rose as much as 80 percent in
their market debut as offerings by cloud-based enterprise
software companies continue to rule the IPO market.
Paylocity's shares opened at a high of $31, valuing the
company at about $1.55 billion. They were up about 53 percent at
$25.94 on the Nasdaq at 1150 ET, making the stock the top gainer
on the exchange.
The Illinois-based company raised about $120 million after
its initial public offering was priced at $17 per share,
slightly above the expected pricing range.
Of the 7 million shares on offer, the company sold 5
million, while the rest came from selling stockholders.
Private equity firm Adams Street Partners is one of the
large stockholders of the company with a 26 percent stake.
Paylocity provides cloud-based payroll and human resources
tools to medium-sized firms and had about 6,850 clients in the
United States as of June 30.
"The company has first mover advantage in the area of
offering payroll and HR services on the cloud," said Francis
Gaskins, a partner at IPO research company IPODesktop.com.
Paylocity, which operates through an extensive referral
network, also provides data reporting and analytics services to
"Category of enterprise software is very much in demand
right now," Gaskins said, adding that the company's focus on
medium-size businesses makes it attractive to investors.
Paylocity expects to tap the growing demand for digital
payroll and manpower management services amid complex business
processes and workflows.
The U.S. market for human capital management and payroll
outsourcing services is estimated to be $22.5 billion in 2014,
the company said, citing a report from market research firm IDC.
Paylocity counts enterprise-focused software providers such
as Ultimate Software Group Inc and Workday Inc
as well as payroll service providers such as Automatic Data
Processing Inc and Paychex Inc among its
The company said revenue rose 29 percent to $77.3 million
for the year ended June 30 while net income fell 64 percent to
Shares of companies that provide services through cloud
computing such as Workday, ServiceNow Inc, Guidewire
Software Inc and Demandware Inc are trading
well above their IPO prices.
Last week, cloud-based health information software provider
Castlight Health Inc's shares rose more than 160
percent in their market debut, making the listing the strongest
by a technology company so far this year.
Deutsche Bank Securities Inc, Merrill Lynch, Pierce, Fenner
& Smith Inc and William Blair & Co LLC were the lead
underwriters for Paylocity's offering.
(Reporting By Neha Dimri in Bangalore; Editing by Don