Paycom Software, a provider of on-demand payroll and human capital technology services, announced terms for its IPO on Monday. The Oklahoma City, OK-based company plans to raise $126 million by offering 6.6 million shares (31% insider) at a price range of $18 to $20. At the midpoint of the proposed range, it would command a fully diluted market value of $1.1 billion. At year end, the SaaS company had about 10,800 clients and a retention rate of 91%.
Paycom has achieved a 38% revenue CAGR since 2009. Revenues grew 40% to $108 million for the fiscal year ended December 31, 2013 as Paycom increased both client count by 17% and recurring revenue per average client by 18%. Adjusted EBITDA jumped 54% to $20 million and adjusted EBITDA margin increased 170 bps to 18.3% in 2013 because of a higher gross margin, partially offset by higher sales and marketing expenses and personnel costs as a percent of revenue.
Paycom Software, which was founded in 1998, plans to list on the NYSE under the symbol PAYC. Paycom initially filed confidentially on December 9, 2013 and had been on our Private Company Watchlist since August 2013. Barclays and J.P. Morgan are the joint bookrunners on the deal.
