Updated from 2:06 p.m. EST
Shares of Web marketing services company
rose 23% Tuesday in its first day of trading.
The Boston-based company, which had been called both
Bronner Slosberg Humphrey
before adopting its tech-ier sounding name when it filed for its IPO in December, issued 9.3 million shares at an opening price of $24, up from the projected range of $18 to $20.
Morgan Stanley Dean Witter
is the lead investment bank on the offering.
The company's shares rose as high as 40, before closing at 29 1/2, up 5 1/2 for the day.
Digitas is using the more than $200 million its offering will raise in part to pay down debt, but also to fuel its global expansion, which could include acquisitions, said Kathleen Biro, vice chairman and president of the firm, in an interview Tuesday. Digitas' roster of blue-chip clients -- including
-- which make up two-thirds of its business, requires the company to grow internationally.
"Our clients were asking us to build a global network," Biro said, adding that while finding a buyer with global clout was a possibility -- "everyone was after us" -- Digitas felt remaining independent was the surest way to maintain its cultural identity.
Digitas' core business is aiding clients in building an online presence, and its services include everything from Web site development to media buying and planning to e-commerce services.
Digitas hopes its story will win over investors. The company's vital statistics are impressive: In 1999, account billings jumped 45% to roughly $1.3 billion, and overall, revenue jumped 45% to $180 million. The company won five of the six new account pitches it participated in, and among the new additions to its client list last year were e-commerce colossus
and department store chain
Neiman Marcus Group
The company added a well-timed accolade earlier this year when trade publication
named Digitas one of its agencies of the year.
For the year ended Dec. 31, Digitas' net loss narrowed to $37.6 million on revenue of $187 million, compared to a loss of $44.8 million on revenue of $122.3 million in 1998.
Digitas will get the proceeds from 6.2 million shares, and current stockholders will sell the remaining 3.1 million shares, according to the company's SEC filings.
Hellman & Friedman Capital Partners III LP
is the primary stockholder selling in the IPO, offering approximately 2.8 million shares.
Biro is confident that the company's "bricks to clicks" business model -- helping move established Fortune 100 companies into cyberspace -- will wear well going forward. "Our job is to help these clients migrate from the old economy to the new economy," she said. "
The Web is like the gorilla sitting at the table. The gorilla isn't going anywhere."