Bentley Prepares for Initial Public Offering

Adena Schutzberg, GIS Monitor, April 25, 2002

It's been some time since a Bentley initial public offering (IPO) was the topic of discussion. Changes within the company and more importantly, those in the economy, put something that seemed a sure thing several years ago, on hold. But, this week, Bentley filed papers that mark the beginning of the IPO process.

The prospectus gives potential investors and anyone else a good look inside the private company. Bentley is looking to raise $172.5 million. In exchange the company will sell of a percentage of the company. How much? We don't yet know, but Brad Holtz, of Cyon Research, points out that typically a company puts up between 15% to 40%. The $172 million is about 85% of 2001 earnings of $202 million. 60% of that revenue came from subscriptions. Bentley has 315,000 user seats, with Bechtel holding 3,000. The company now employs 1,145 people.

Bentley bought a stake in mechanical developer Rebis earlier this year. The prospectus notes that the agreement gave Bentley the option to buy the entire company, which, according to Holtz, is likely. This is odd since Rebis is, and has been, very tight with Autodesk.

Intergraph owns 29% of Bentley, which means that company could bring home some good money, should all go well.

The prospectus goes on to note that the market for MicroStation is mature and that the company cannot assure investors that it will grow. Instead, new products - either developed or acquired - will be the source of future revenues. That, I suppose, is where Rebis fits in.

The offering will be on the NYSE, which is the older, household name market (home of IBM, Ford, Coca Cola, the GAP, and others), not the more tech heavy NASDAQ (home of Microsoft, Intergraph and Autodesk). The company's symbol will be BSS.

What will the impact of an IPO be on GIS at Bentley? I searched the IPO documents to see if the topic even came up. The term was in there once - in a non-compete clause of a contract with Intergraph. I'll suggest, as I have in the past, that Bentley's energies of late have not focused on GIS. My sense is that once Bentley is public it will really need to focus on return, like every other public company. My guess is that GIS was never a big money maker at Bentley and will stay small, should it stay at all.

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