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LogMeIn (LOGM) RSS Feed

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Created
06/30/09
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500 Unicorn Park Dr
Woburn, MA 01801-3377
(781) 638-9050


LogMeIn allows its customers to leave their laptops at home. The company provides remote access software and services to consumers, small and medium-sized businesses, and IT service providers. Consumers and remote workers can access their computer's desktop, files, applications, and network resources. Businesses and IT service providers use LogMeIn's technology to provide remote management and support. LogMeIn offers both free and subscription-based services, which can cost up to $1,900 a year. Its paid services add advanced features such as file transfer, remote printing, and drive mapping. LogMeIn's customers include 3M, AMD and IBM.


For the first time in more than a year, a venture-backed Massachusetts company intends to go public.

LogMeIn Inc. of Woburn, maker of software for remotely controlling personal and business computers, hopes to sell 6.6 million shares at between $14 and $16 a share and could raise as much as $107 million.

Lead underwriters for the offering are JPMorgan Chase & Co. and Barclays Capital. The price is expected to be set today, with the stock offering likely tomorrow.

Emily Mendell, vice president of strategic affairs for the National Venture Capital Association in Arlington, Va., said the LogMeIn offering suggests the beginnings of an awakening in the moribund IPO market.

“The IPO window has cracked open a bit,’’ said Mendell. “I think the market has become slightly more stable.’’

Mendell said that LogMeIn will be only the sixth venture-backed company to go public in the United States this year. Mendell said that investors have been kind to the other five firms. “The companies that have gone out have done OK,’’ she said. “They’re all trading at or above their offering price.’’

Founded in 2003, LogMeIn began by offering free software that let computer users connect to their home or office machine over the Internet and operate the computer from a remote location. The company still offers a limited free version of this software, but paying customers get advanced versions with additional features.

LogMeIn also makes programs to let system managers perform remote data backups, system maintenance, and technical support. The company’s software is sold on a subscription basis, with customers paying between $30 and $1,900 a year.

LogMeIn faces major rivals in the remote-control business, including Microsoft Corp., Citrix Systems Inc., and Cisco Systems Inc. But it turned profitable in the third quarter of 2008.

It has also enjoyed rapid revenue growth, from $11.3 million in 2006 to $51.7 million in 2008. In its most recent quarter, ended March 31, LogMeIn generated $17 million in revenue and net income of $2.1 million.

Eric Guja, research analyst at Renaissance Capital LLC in Greenwich, Conn., said LogMeIn’s tactic of giving away free software has enabled the company to market itself on the cheap, mainly through word-of-mouth and low-cost online advertising. “It’s not like a typical larger software company where they have a lot of feet on the ground trying to sell the product,’’ Guja said.

Benjamin Howe, chief executive of America’s Growth Capital, an investment bank in Boston, said that it is difficult for a subscription-based software company to achieve profitability, but once it does, investors can expect a steady stream of earnings.

“It’s a great business model,’’ Howe said. He added that LogMeIn’s rapid revenue growth makes it a good IPO candidate. “For the superfast growing, supercharged growth companies, the IPO market is wide open.’’

http://www.boston.com/business/markets/articles/2009/06/30/woburn8217s_logmein_plans_ipo/

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