Launched by a group of former Cisco employees in 2000, this specialized outsourcer manages service agreement renewals for blue-chip tech firms such as Adobe, VMware and NetApp. ServiceSource collects commissions based on the value of contract renewals it generates, allowing its customers to focus efforts on developing and selling new products. ServiceSource plans to raise $99 million by selling 11.9 million shares at a range of $7.50-$9.00. Existing shareholders are selling 3.9 million shares, representing 33% of expected deal proceeds. Morgan Stanley and Deutsche Bank are the lead underwriters on the deal, which is on the IPO calendar for the week of March 21.
ServiceSource manages the renewals of maintenance, support and subscription agreements for leading tech companies. Its dedicated sales teams are aided by the company's extensive data warehouse and growing portfolio of cloud based applications. In total, its service sales organization numbers 1,323 employees, operating from six sales centers around the globe and selling in 30 languages. In recent customer engagements, ServiceSource claims to have boosted average renewal rates by 15 percentage points, and in 2011, it expects to manage contract renewals representing a potential $5 billion in service revenue streams (+35% y/y).
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