Workday Boosts IPO Terms

Workday Inc. looks like it is going to be well received under strong investor demand. At least that is what the price range is telling us. The human resource software provider is set to go public on or around Friday, and the latest amendment to the company's S-1 filing with the Securities and Exchange Commission shows that the expected price range has risen to $24 to $26 per share from a prior range of $21 to $24 per share.

The filing is for 22,750,000 shares, but that offering could grow to 26,162,500 shares if all shares are taken in the overallotment option. Morgan Stanley and Goldman Sachs are leading the offering, but the underwriting syndicate is huge: Allen & Co., J.P. Morgan, Cowen & Co., JMP Securities, Pacific Crest, Wells Fargo and Canaccord Genuity.

Workday will list under the ticker WDAY on the New York Stock Exchange. This offering will have A-shares and B-shares outstanding, with a combined total of 160.29 million shares after the offering. That is broken down as 22.75 million A-shares and 137.54 million B shares.

The filing notes:

Mr. Duffield and Mr. Bhusri, our co-founders and co-CEOs, and their affiliates, who after our initial public offering will hold approximately 67% of the voting power of our outstanding capital stock, will have the ability to control the outcome of matters submitted to our stockholders for approval ...

In short, this is an IPO where the founders will be in total control.

Use of proceeds:

We intend to use the net proceeds to us from our initial public offering for working capital and other general corporate purposes. In addition, we may use a portion of the net proceeds from our initial public offering for acquisitions of complementary businesses, technologies, or other assets.

JON C. OGG

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