Ceridian Holdings HCM completes largest ever IPO in Minnesota

April 26, 2018 GMT

Ceridian Holdings HCM Inc. has triggered Minnesotas largest ever initial public offering.

The Bloomington-based company on Thursday priced its initial stock at $22 a share, above the previously disclosed range of $19 to $21. It has already raised $462 million, eclipsing NRG Energys IPO results of $423 million in May 2000.

The money raised by Ceridian is more than the seven most recent IPOs from Minnesota companies combined.

The company sold 21 million shares and a list of major New York City-based underwriters have an overallotment option to sell an additional 3.15 million shares. The company also ran a concurrent private placement of stock that contributed to the proceeds. If underwriters exercise their overallotment the proceeds could exceed $580 million. The stock will trade under the ticker symbol, CDAY.


Major shareholders Thomas H. Lee Partners and Cannae Investors LLC, agreed to purchase $100 million of common stock in the private placement, theyll remain the largest shareholders of Ceridian.

Ceridian is a global human capital management software company whose principal product, Dayforce, provides payroll, benefits and workforce-and-talent management services to more than 3,000 customers. The cloud-based platform is designed to ease the administrative work of customers and their employees.

Ceridian, a successor to Control Data Corp., was previously a publicly traded company, but it went private in 2007 when it sold itself for $5.3 billion to affiliates of private equity firm Thomas H. Lee Partners and Cannae Holdings Inc. In the subsequent years it has remade itself around the Dayforce product that Ceridian acquired in 2012.

In 2017 the company had total revenue of $750.7 million, up 6.6 percent from the previous year, and had a net loss of $10.5 million and improvement over the $93 million it lost in 2016.

Ceridian plans to use proceeds of the offering to redeem the $475.0 million principal amount of outstanding 11 percent senior notes due 2021 and for general corporate purposes.

The offering far exceeded expectation. The companys initial registration statement with the Securities and Exchange Commission indicated the company might raise $200 million, and a filing earlier this week listed a potential offering range of $19-$21 per share. That filing stated the offering could raise $483.1 million, but that every $1 increase of the offering price above $20 per share would add $19.3 million to the offering.

Patrick Kennedy 612-673-7926