Blackbaud sets terms of $115M IPO

Charleston-based software maker Blackbaud Inc. has set the terms of its $115 million initial public offering, saying it plans to sell 9.1 million shares of stock at $10 to $12 each.

The company also disclosed the individual shareholders who plan to cash in some of their holdings, a list that includes founder Tony Bakker, three of Blackbaud's top executives and the president of the Charleston Battery professional soccer team, of which Bakker is the majority owner.

All of the proceeds from the IPO will go to the investors, not the company. The biggest seller is Hellman & Friedman Capital Partners, which paid $155 million to buy a majority stake in Blackbaud from Bakker in 1999. The San Francisco-based investment firm and its related entities plan to sell nearly 4.3 million shares for $47.2 million, assuming a midpoint $11 offering price, according to a statement Blackbaud filed this week with the Securities and Exchange Commission.

Bakker, who still owns about 15 percent of the company, also is taking some money off the table. He and various trusts set up for his family plan to sell 2.5 million shares, which at $11 each would net them $28.3 million and reduce Bakker's ownership stake in the company to 8.3 percent.

Three senior managers at Blackbaud also plan to cash in about $9.3 million of their stock, based on an $11 offering price, according to the SEC filing: -- Robert J. Sywolski, president and chief executive officer, would receive about $5.3 million and reduce his holdings to 2.6 million shares. -- Louis J. Attanasi, vice president for strategic technologies, would receive about $2.5 million and cut his holdings to 302,843 shares. -- Gerald J. Zink, vice president of customer support, would receive $1.5 million and trim his holdings to 186,786 shares.

At least one outside shareholder who is well-known in local athletic circles also is participating in the IPO bonanza. Nigel Cooper, president of Bakker's professional soccer team, plans to sell nearly 172,000 shares, or 42 percent of his Blackbaud holdings. Other sellers include former Blackbaud executives, according to the filing.

Blackbaud has applied to list its common stock on the Nasdaq National Market under the symbol BLKB. The company announced the IPO in February but did not spell out certain details, such as the number of shares to be sold and the price.The company did not announce the date of the proposed sale in its latest filing.

Blackbaud and its stockholders are barred from commenting about the IPO under the SEC's "quiet period" rule. The company also included in its latest filing details about its financial performance in the first quarter. Blackbaud reported a $4 million profit on sales of $31.5 million through March 31, compared to a $51,000 loss on revenue of $27.3 million for the same period last year.

The company develops fund-raising financial software for charities, arts groups, schools and other nonprofit organizations. Its name is a combination of "blackboard" and "baud," a technical term that refers to the speed at which data travels over telephone lines. Bakker formed the company in 1981 in New York City and moved it to Mount Pleasant in 1989. In 1997, the company snapped up its biggest competitor, doubling its customer base, which now numbers about 12,500. Soon after, it announced it would centralize into a newly built headquarters on Daniel Island.

The company now employs 815 workers in Charleston, Scotland and Australia. Bakker, who stepped down as CEO in 1999 after the sale to Hellman & Friedman, maintains business relationships with Blackbaud outside of his stock holdings. The company pays $4.3 million a year to lease its 230,000-square-foot office building from a company that is 60 percent owned by Bakker. Also, it pays $200,000 a year to put its name on the Battery's home stadium, of which Bakker is principal owner. That promotional agreement is scheduled to expire in October 2009.