This Boise software company is now preparing to go public with a stock offering
Privately held Boise software company Clearwater Analytics is moving ahead with plans for an initial public offering of stock.
In a filing with the federal Securities and Exchange Commission, Clearwater, which makes software that helps companies manage their investment portfolios, did not say how many shares it would issue nor the price.
The company said in a news release that the number of shares and the selling price have not been determined. The filing does not indicate what proportion of Clearwater’s shares would be offered initially to the public and what portion would be kept by current owners.
Bloomberg reported that Clearwater was targeting a valuation of more than $4 billion in its IPO.
The Clearwater Building at 777 W. Main St., a nine-story building adorned with the company’s logo, is probably how Clearwater is best known to most Boiseans. It has served as the company’s headquarters since 2016.
Founded in 2004 by Doug Bates and brothers Dave and Michael Boren, Clearwater is now controlled by Welsh, Carson, Anderson & Stowe, a New York buyout firm that took a majority stake in 2016.
Clearwater has 1,259 employees, with more than half, 652, in Boise. An additional 180 are located in other parts of the United States; 274 are in Noida, India; and 132 in Edinburgh, Scotland.
In the SEC filing Monday, Aug. 30, CEO Sandeep Sahai said the company philosophy of “attracting, retaining and continuing to build an engaged workforce will ensure that our clients are successful.”
“I am in awe of how our employees — 80% of whom are millennials — consistently strive to do the right thing and create lasting impact,” Sahai said in the filing. “Not only do they care about clients, solutions and innovation, they care about the climate, the marginalized, the unjustly vilified and the underprivileged. We can all learn from them.”
The company said revenues from its more than 1,000 clients in 29 countries increased 21% between 2019 and 2020, from $168 million to $203 million. Fifty of its blue-chip clients, including insurance companies, asset managers and large corporations, accounted for $1 million or more apiece in annual revenues as of June 30, 2021, according to the filing.
Clients include Starbucks, Yahoo, Zions Bank, Facebook, Garmin and Netflix.
Last summer, Welsh, Carson, Anderson & Stowe hired an investment bank to review options for the company. They included a sale, an initial public offering, or investment to extend the company’s expansion in Europe and Asia.
Clearwater would be the latest Idaho company to go public as its owners seek to capitalize on their investments.
When Albertsons Companies issued its IPO in June 2020, the Boise grocery chain was valued at $9.3 billion, Reuters reported. Yogurt maker Chobani, which is based in New York state and has its largest plant in Twin Falls, could be valued at from $7 to $10 billion if it offers an IPO, the Wall Street Journal reported.
In another big Boise tech deal, Cradlepoint was bought last year by Swedish giant Ericsson.
Clearwater’s Boise headquarters has been quieter than usual. Since the coronavirus pandemic began in March 2020, the majority of Clearwater’s employees have worked from home. That arrangement will continue for the foreseeable future, Clearwater said in its filing. The company plans a phased return to offices when health conditions improve.
It has a 10-year lease on the Boise headquarters, with two optional five-year extensions. Clearwater pays $2.4 million per year for the space, along with $1 million a year for other sales and client services offices, it said in the filing.
Clearwater said it has no plans to pay cash distributions or dividends on its Class A stock in the “foreseeable future.” Clearwater plans to use available funds to repay debt, supply working capital and support operations and to finance growth and development.
If the IPO moves forward, Clearwater plans to list on the New York Stock Exchange under the ticker symbol CWAN.
Details beyond those provided in the filing were not available.
“At this time, we are in our quiet period and restricted from providing more details to the media about our filing,” Clearwater spokesperson Gail Marold said in an email.
Company and its founders scrutinized
Clearwater and the Boren brothers have made news, not always favorably:
▪ The Boren brothers, who sat on Clearwater’s seven-member board of directors until October 2020, have attracted attention for their opposition to a trail in the works between Stanley and Redfish Lake that will wind through Dave Boren’s property.
A federal court allowed construction to begin on the easement in place when he bought the 1,800-acre ranch next to Stanley in 2016.
▪ On Aug. 25, the Custer County Commission voted to uphold a conditional use permit for a controversial airstrip near Stanley. The airstrip, owned by Michael Boren, was first approved in May.
For months the airstrip has been a source of tension between Michael Boren and his neighbors, who say Boren’s frequent helicopter and airplane flights from the property are disruptive and violate the rules of the Sawtooth National Recreation Area where his Hell Roaring Ranch property is located.
▪ Two years ago, Clearwater was ordered to pay $44 million in damages in a lawsuit over trade secrets.
Connecticut-based financial software company SS&C Technologies Holdings Inc. alleged that Clearwater Analytics hired two SS&C employees who made copies of confidential SS&C product and customer documents before leaving SS&C with the intent to use them at their new jobs.
Clearwater Analytics denied any wrongdoing, but a jury in Cook County, Illinois, sided with SS&C and ordered the Idaho company to pay damages, including $28 million in punitive damages.
This story was originally published September 4, 2021 at 4:00 AM.
