August 6, 2010 / 1:42 PM / 9 years ago

UPDATE 3-IntraLinks shares flat in NYSE debut

* Shares close flat with $13 IPO price

* Shares priced below range, IPO raised about $143 mln

* Trading on NYSE under symbol “IL” (Updates with closing price)

By Liana B. Baker and Clare Baldwin

NEW YORK, Aug 6 (Reuters) - Shares of software maker IntraLinks Holdings Inc IL.N closed flat in their market debut on Friday.

The shares dipped as low as $12.55 but recovered to close at $13 on the New York Stock Exchange. The company sold 11 million shares at $13 each on Thursday, raising about $143 million. It had planned to sell shares for $14 to $16 each.

The IPO followed two earlier attempts by IntraLinks to go public.

The company was founded to sell web-based collaboration tools to debt capital markets executives, but it quickly expanded to sell software for M&A transactions. It now also sells software to pharmaceutical, energy, legal and other sectors, but it is not profitable.

Revenue grew 15.3 percent to $39.9 million in the three months ended March 31, while its net loss narrowed 54.8 percent to $5.5 million.

IntraLinks said it would use the proceeds from the IPO to pay down debt. As of March 31 it had net long-term debt of $290.2 million, according to a filing with the U.S. Securities and Exchange Commission.

The filing shows that nearly a fifth of IntraLinks’ revenue for the three months ended March 31 went toward interest payments.

Francis Gaskins, president of IPOdesktop.com, called the interest payments “a large uncontrollable fixed expense.”

“It’s not healthy,” he said. “It’s a metric showing that the private equity people were desperate to pay back their debt.”

But IntraLinks Chief Financial Officer Anthony Plesner said the company has weathered a higher debt load before and that paying off nearly half of its debt with the IPO would help its prospects.

“Taking this level of debt off the books will obviously free up more cash flow for us going forward as well as improve EPS performance because of lower servicing costs,” he said in an interview with Reuters.

IntraLinks’ main shareholders include TA Associates Inc and Rho Capital Partners Inc.

Underwriters on the IPO were led by Morgan Stanley, Deutsche Bank Securities and Credit Suisse.

The shares trade on the New York Stock Exchange under the symbol “IL.” (Reporting by Clare Baldwin and Liana Baker; additional reporting by Jonathan Stempel; editing by Dave Zimmerman, John Wallace and Bernard Orr)

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