Roundup: Covisint Stocks Soar After IPO, Longbow Software Opens U.S. Office in Ann Arbor
It’s been a busy week in Southeast Michigan’s tech scene. Here’s a roundup of some of the recent news:
–On Wednesday, Compuware announced the pricing of its initial public offering of shares of Covisint, its wholly owned subsidiary. The offering includes 6.4 million shares, representing approximately 17.6% of its issued and outstanding shares of Covisint. The shares began trading on the Nasdaq Global Select Market on Thursday under the symbol COVS, and, as of noon today, stock prices had soared to $12.61 per share.
Covisint, which is the first Detroit-based technology company to undergo an IPO for several decades, provides a cloud computing platform that allows customers mostly in the automotive and healthcare sectors to securely connect and collaborate with partners and suppliers. The company, which was founded in 2000, ran into trouble early on and was acquired by Compuware for a mere $7 million despite the fact that it had launched with a $500 million investment from six major automakers, including GM and Ford.
It’s not clear how the Covisint IPO will affect the fortunes of parent company Compuware, which rejected a multibillion-dollar takeover attempt by the New York-based Elliott Management Corp. earlier this year.
–Montreal, Canada-based firm Longbow Software will locate its first U.S. office in Ann Arbor. Longbow Software is a supply chain software development company that specializes in warehouse and workforce management software. Officials from Ann Arbor SPARK say Longbow chose to locate in Michigan over a competing site in Chicago, no doubt enticed by the $250,000 Michigan Business Development Program grant it received this week. Longbow is hiring 32 programmers to start, and expects the office to officially be open in 2014.
–Dan Gilbert’s Rockbridge Growth Equity, a Detroit-based private equity firm founded in 2007, announced last week that it has acquired RapidAdvance, a Maryland-based financial services operation that provides capital to small businesses. The terms of the acquisition were not disclosed.
According to the company’s website, RapidAdvance provides “alternative business and cash advance loans” to small businesses, meaning the terms of the loan are based on the business’ cash flow rather than a credit score—similar to the way a consumer payday advance loan works. According to the press release sent by Rockbridge, RapidAdvance has provided nearly $600 million in working capital to thousands of small business owners across the nation.