(Bloomberg) -- Pivotal Software Inc. Chief Executive Officer Robert Mee said his company will continue to benefit from its relationship to Dell Technologies Inc. after its initial public offering Friday.
Pivotal was once part of a joint venture with EMC Corp., VMware Inc. and General Electric Co., becoming part of Dell after the company bought EMC in 2016. While Mee said Michael Dell and his company exerted “zero influence” or “pressure” to spur the IPO, Dell has been exploring strategic options for its corporate structure as it contends with a massive debt burden.
“Since the acquisition happened with Dell, we've got an increasing lift with go-to-market sales,” Mee said. “I see that continuing.” That will especially be true with VMware selling its products, he said.
Shares of the enterprise software company were priced at $15 and opened at $16.75. They were trading at $15.46 at 1:25 p.m. in New York Friday, giving the company a market value of $3.87 billion. San Francisco-based Pivotal offered 37 million shares, including those from GE selling about 20 percent of its stake.
Pivotal will spend most of the IPO funds on sales, marketing and research and development, as it targets the world's 2,000 largest firms, Mee said. The company makes software that allows corporate clients to develop and operate applications for the cloud. Its revenue is split about equally between subscription sales of its cloud platform and services, but Mee said he expects that the quicker growth of subscription-based offerings will change that mix in the future. The firm posted a net loss of $164 million on total revenue of $509 million for the year ended Feb. 2.
Morgan Stanley, Goldman Sachs Group Inc. and Citigroup Inc. led the offering. Pivotal listed on the New York Stock Exchange under the symbol PVTL.
To contact the reporter on this story: Nico Grant in San Francisco at ngrant20@bloomberg.net.
To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Molly Schuetz, Michael Hytha
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