Envestnet, Another IPO Meeting Soft Demand (ENV)

Envestnet Inc. is not looking like a solid IPO before it even gets out to the public.  This is one of this week’s scheduled IPOs that is expected to begin trading on Thursday or Friday.  The provider of Web-based investment solutions and investment tools to independent financial advisers and independent financial firms is joining the many low-demand trends seen in IPO’s so far in 2010.

The company plans to sell 7.7 million shares in a price range per share of $9.00 to $10.00.  The problem is that the original price range was set at $12.00 to $14.00.

Of the offering, the company is selling 3,850,000 shares of common stock and the selling stockholders are selling 3,850,000 shares.

As of March 31, the company noted that its revenue licensing platform was being utilized by approximately 5,700 financial advisors with approximately 545,000 investor accounts.  In the year ended December 31, 2009, the company had:

• total revenues of $77.9 million,
• income from operations of $4.3 million,
• a net loss of $0.9 million,
• adjusted EBITDA of $10.6 million,
• adjusted operating income of $6.1 million,
• adjusted net income of $2.4 million.

In February 2010, Envestnet signed a seven-year platform services agreement with FundQuest Incorporated, a global investment and managed account services operation of BNP Paribas. The company gave guidance for its second quarter of total revenues for the June-end quarter of $23.8 to $24.3 million.  The figure represents 34% to 37% from total revenues of $17.7 million for the quarter ended June-2009.

Morgan Stanley, UBS, and Barclays are the lead underwriters; but other syndicate members are listed as William Blair, RBC Capital, Stifel Nicolaus, Sandler O’Neill, and Melvin & Company.

JON C. OGG