IPO Watch: Deltek Files S-1

After much anticipation since New Mountain funds took the company private with a 75% stake in 2002, Herndon based Deltek Systems filed its S-1 on May 8th 2007. As a Project Based Solution (PBS) vendor, nothing could be more fitting than coming out with the NASDAQ symbol "PROJ". While private, Deltek remained active and acquired Wind 2 in 2005 and Welcom in 2006 leading to a doubling of its size and customer base. The results of this acquisition and maintenance strategy speak for themselves -- software license growth up 215.7%, maintenance increases of 89.1%, and overall revenues up 153.33% since 2002 (see Figure 1.) Key to Deltek's future will be the expansion into new vertical areas beyond its strengths in public sector, A/E/C, non-profit, and research. Deltek's key competitors include industry stalwart Primavera, .NET competitor Epicor, and Microsoft with its Project and Solomon offerings.

Figure 1. Deltek Consolidated Financials as Filed in S-1

		2002				2003				2004				2005				2006
		(in thousands, except per share data)
Statement of Operations Data:
REVENUES:
Software license fees		$	23,742			$	36,636			$	34,934			$	45,923			$	74,958
Consulting services			18,063				22,842				28,585				41,212				66,573
Maintenance and support services			43,987				47,778				54,178				63,709				83,172
Other revenues			4,512				2,091				3,516				2,112				3,565
Total revenues			90,304				109,347				121,213				152,956				228,268

As the Project Based Solutions (PBS) space heats up, expect rapid consolidation in the next 3 years among vendors such as Agresso, Artemis Software, Augeo Software, BST Global, CA (Computer Associates)Niku, Computer Methods International Corp. (CMiC), Deltek, Dexter & Cheney, Epicor Software, IFS, Lawson, Maconomy, Maxwell Systems, Mercury Software, Meridian Systems, Microsoft Dynamics, Oracle, OpenAir, Pacific Edge, Planisware, PlanView, Primavera Systems, ProSight, Sage Software, SAP, Softrax, Tenrox, and Viewpoint Software (formerly BidTek). According to Forrester Research, the PBS market is expected to grow to $6.5B by 2010.

(The personal contents in this blog do not reflect the opinions, ideas, thoughts, points of view, and any other potential attribution of my current, past, or future employers.)
Copyrighted 2007 by R Wang. All rights reserved