CLPS Plans Nasdaq Debut Thursday to Raise Up to $11 Million
The Shanghai-based information technology and consulting company, being listed as “CLPS” on Nasdaq, received approval Wednesday to sell 2 million of its shares at a price ranging between $5 and $5.50 per American depositary share.
CLPS Inc., a Shanghai-based information technology and consulting company, is expected to launch its initial public offering on the Nasdaq Capital Market on Thursday as the company seeks to raise as much as $11 million.
According to a regulatory filing Wednesday, the company, to be listed as "CLPS," received approval this week from Nasdaq officials to sell 2 million of its shares in the range between $5 and $5.50 per American depositary share. In April, CLPS announced it intended to raise $14 million in its IPO.
The company provides outsourced IT solutions to banking, insurance, and financial sectors in China and globally. Through its CLPS College platform, the company also recruits and trains employees in collaboration with over 100 universities to promote educational efforts in areas including financial and technical skills, programming languages, and blockchain solutions.
With several offices in China, Australia, and Singapore, it lists Citibank, AIA, China Life Insurance, Experian, and eBay among its clients. CLPS has also partnered with IBM and FICO.
According to the company's investor presentation, revenue from IT services in China is anticipated to grow 21 percent annually to a total of $9 billion by 2020. The company said large enterprises globally were experiencing a shortage of qualified IT personnel, fueling "significant" demand for outsourced IT consulting.
According to its regulatory filing, CLPS had $22.2 million in revenue for the final six months of 2017, an increase of 55 percent from the same period the year before. Its net income for the same time grew to $1.3 million, up nearly 30 percent from 2016.
Among the risks CLPS noted in its prospectus were the company's reliance on a small number of major clients, such as Citibank, which accounted for nearly 37 percent of the 2017 revenue.
The current funds and the proceeds from the IPO are expected to last the company for a year. CLPS said the proceeds would be used for global expansion, research and development, and talent acquisition, among other things.
The Benchmark Co. and Cuttone & Co. are acting as underwriters at the IPO. They may exercise over-allotment to purchase 300,000 additional shares.