Hedge Fund Coatue Backing IPO Of Cloud Storage Firm Box

Enterprise cloud storage firm Box’s impending IPO is looking good and likely to price at the high end of its anticipated $11 to $13 range, according to a January 22nd article in the Wall Street Journal. Box first filed for an IPO back in June of last year, but the plans were delayed when technology stocks got hammered in the fall, and the firm eventually turned to the private market to raise capital.

Box is now apparently ready to be a public company. The firm plans to sell 12.5 million shares somewhere between $11 and $13, according to an SEC filing. At $12 a share, the IPO would raise $150 million to give the cloud storage company a market cap of greater than $1.4 billion.

More on Box IPO and Coatue

Of note, Box’s IPO price is much lower than its peers. Some analysts at the banks underwriting the IPO expect Box to produce close to $280 million in revenue in 2015, meaning shares would be priced at around 5 times forward revenue. That compares to a group of online software firms, including Workday Inc. and ServiceNow Inc., that trades at about 10 times revs, according to data from FactSet. Of course, those looking at valuation from a non comp perspective would likely view the 5X estimated revenue as pricey.

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Coatue Management LLC (who bought into Box before the IPO at $20 a share in July) has agreed to purchase up to 10% of the IPO at the offering price, based on information in Box’s filing on Thursday. That will likely significantly reduce the cost basis of their initial investment. The filing also notes Coatue is already protected by a “ratchet” that boosts the amount of shares they own if the IPO comes in below $20.

The company priced shares this morning at the high end, at $18 per share.