November 1, 2007 / 5:47 PM / 11 years ago

UPDATE 1-Deltek shares fall in market debut

(Adds company comment, background)

NEW YORK, Nov 1 (Reuters) - Shares of software maker Deltek Inc PROJ.O fell in their market debut on Thursday, a day after an initial public offering that raised $162 million.

Shares were flat at $18 per share when the market opened, before falling as low as $17.01 a share. In midday trading, Deltek’s shares were trading at $17.93.

On Wednesday, the 9-million share offering priced at $18 per share, compared with a forecast range of $17 to $19.

Chief Executive Kevin Parker said the company — which was a publicly traded company before being taken private about five years ago by the founding deLaski family — launched its second IPO as a means to boost recognition of the Deltek brand.

“It is an important time to have a broader audience, and we are focusing on expanding globally,” Parker said in a telephone interview.

Based on its offering price of $18, Deltek had an initial market capitalization of nearly $775 million.

The company sold 3 million shares while stockholders — including private equity firm New Mountain and the deLaskis — sold an additional 6 million shares.

Proceeds from the offering will be used to pay down debut, which Parker said will give the company greater ability to reinvest in the company.

It will also pay its largest shareholder, private equity firm New Mountain Capital, a $1.1 million transaction fee related to the offering.

New Mountain surpassed the deLaski’s as Deltek’s majority shareholder after a 2005 recapitalization.

Following the offering, New Mountain’s stake will be roughly 53 percent, according to a regulatory filing with the U.S. Securities and Exchange Commission.

Parker said Deltek’s “out of the box” software was gaining increasing traction with customers, who include information technology contractors and aerospace and defense companies, and it expected to continue posting strong revenue and income growth.

For the six months ended June 30, Herndon, Virginia-based Deltek had a net profit of $9.6 million on revenue of $130.8 million, which was up about 19 percent on the same period a year earlier. In the first half of 2006, profit was $6.5 million on revenue of $106 million.

Parker said the company did not have any plans to roll out “on demand” versions of its software, which would allow customers to download its applications over the Internet, a backbone of businesses such as (CRM.N), and Larry Ellison’s NetSuite, which has filed to sell shares in an IPO.

“Resonance for on-demand has been pretty nonexistent” with Deltek customers, Parker said.

The company has made five acquisitions since Parker joined the company in mid-2005, and he said the firm intends to match that pace, boosting growth through acquisitions.

Underwriters led by Credit Suisse have the option to purchase an additional 1.3 million shares to cover overallotments.

Reporting by Lilla Zuill

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