Quintus Shares Triple in First Day, Valuing DLJ Stake
at $651 Million
By Per H. Jebsen
Quintus Triples on First Day, DLJ Stake Now $651 Mln (Update4)
(Adds comment by Quintus executive Lawrence Byrd in 6th-8th
paragraphs, Hambrecht & Quist analyst Reginal King in 13th
paragraph.)
Fremont, California, Nov. 16 (Bloomberg) -- Quintus Corp.,
whose software manages customer orders and service, tripled in
its first day, the latest IPO by a company that speeds up
Internet commerce to be snapped up by investors.
The Fremont, California-based company rose 37 to 55. About
10.1 million shares changed hands. The company has a market value
of $1.77 billion at today's close.
Quintus' software allows companies to handle the 50 million
e-mails a day that customers requesting product information and
service are expected to send to companies by 2001. The software
lets businesses manage their email, telephone, and Web chatroom
interactions with customers, it said.
Every company will have customer management software as the
Internet grows, said Paul Hagen, a senior analyst with Forrester
Research Inc. in Cambridge, Massachusetts. It lets you ''manage
your relations with your customer across all of these channels.''
Quintus' clients include Anheuser-Busch Cos. Inc., Citigroup
Inc., Lucent Technologies Inc., Procter & Gamble Co., and United
Air Lines Inc. The company lost $1.7 million on sales of $13.3
million for the six months ended Sept. 30, compared with a loss
of $5 million on sales of $15.9 million for the same period a
year ago.
''Customer service is now being seen as fundamental to
electronic commerce and to companies' brands online,'' said
Lawrence Byrd, 42, vice president of marketing at Quintus. He co-
founded Quintus in 1984.
''Most Web sites are like a store where you can't see
anyone; as a result, most people abandon their Web shopping
experience,'' he said.
Quintus' software helps businesses respond to customer
queries more quickly, he said.
Quintus' 36-year old CEO, Alan Anderson, holds a 4 percent
stake now worth $62.9 million. Donaldson Lufkin Jenrette Inc.
holds a $651.3 million stake through its Sprout Group venture
capital arm. DLJ made its investment in Quintus in 1995,
according to Byrd. DLJ's gain on its investment would equal
$622.8 million, based on an average share price for existing
shareholders of $2.41.
Quintus faces competition from companies such as San Mateo,
California-based Siebel Systems Inc., which provides customer-
service and call-center software, and San Jose, California-based
Clarify Inc., which also makes customer-support software, the
company said.
Other competitors include Palo Alto, California-
based Kana Communications Inc. and San Francisco-based Genesys
Telecommunications Laboratories Inc., both of which help
companies manage large volumes of customer emails.
''It's a competitive space, but (Quintus) will be a
player,'' Hagen said.
Quintus bought Austin, Texas-based Acuity Corp., a maker of
software to manage Internet-based customer interactions, on
Wednesday for 5.8 million Quintus shares, worth $320 million at
today's close.
The acquisition of Acuity gives Quintus a better ability to
provide Web-related customer service software, said Reginal King,
an analyst with Hambrecht & Quist LLC.
Quintus sold 4.5 million shares at $18 each yesterday,
raising $81 million. The shares sold $1 above the top of the $15
to $17 range set by Donaldson Lufkin Jenrette Securities Corp.,
which handled the sale of the 14 percent stake.
Quintus will use $18.2 million of sale proceeds to fund the
conversion of preferred into common stock, and the remainder for
general corporate purposes. Some of the proceeds may go to
funding sales and marketing expenses, expected to top $25 million
in the next 12 months.
CEO Anderson is a former senior vice president for
OpenVision Technologies Inc., which was acquired by Veritas
Software Corp., a maker of data storage management software.
Quintus trades with the symbol ''QNTS'' on the Nasdaq Stock
Market. Dain Rauscher Wessels and SG Cowen Securities assisted in
the sale.
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