SAS’ Jim Goodnight says he wants the company to start selling stock by 2024
CORRECTION: This story has been corrected to reflect that a quote given by Arvind Malhotra was mistakenly attributed to Randy Guard.
Just two weeks after entertaining offers to sell the company, SAS Institute CEO Jim Goodnight said Thursday that he plans to take his company public via an initial public offering by 2024.
One of the Triangle’s largest employers and a giant in software analytics, SAS has remained privately held since it was founded by Goodnight in 1976.
But earlier this month, Goodnight had listened to offers from the semiconductor company Broadcom that would have valued the company as high as $20 billion.
Goodnight and his co-founder John Sall, however, changed their minds about potentially selling the company.
“By moving toward IPO readiness, we can open up new opportunities for SAS employees, customers, partners and our community to participate in our success, ensuring the brightest possible future for all of us,” Goodnight said in a statement announcing his plans.
“As an organization, we are on a solid path forward, with sustainable growth that continues to build upon the trusted brand and platform we have created. We have built a strong operational and financial foundation, setting us up for an even better future. Now, it’s time to prepare for this next chapter.”
SAS declined to make any executives available for interview about the announcement.
The company had revenue of around $3 billion last year, a number that was down around 2% from 2019 because of the pandemic.
On Thursday, SAS said revenue increased 8.4% in the first six months of 2021.
Goodnight owns two-thirds of SAS, and Sall owns the remaining third, SAS spokeswoman Shannon Heath confirmed in an email.
Heath said that SAS employees will be able to buy equity in the company “if SAS becomes a publicly traded company.”
Arvind Malhotra, a professor at UNC’s Kenan-Flagler School of Business, said depending on how SAS makes equity available to employees, the IPO could help its ability to attract and retain talent.
SAS lost several key executives in the past year.
In January, Oliver Schabenberger, who was considered the heir apparent to Goodnight, left his role as chief technology officer and chief operating officer to join the growing startup SingleStore, The N&O reported.
And Randy Guard, who was SAS’ chief marketing officer until last year, also decamped to a startup. He now holds the same role for Durham-based fintech startup Spreedly.
Many public companies offer stock options as part of their compensation packages for employees. At the moment, SAS can’t do that.
“It’s a dual-pronged benefit,” Malhotra said. “Existing employees can become more loyal by investing in the company, and it could help with attracting new talent.”
This is the second time that SAS has indicated it would like to sell stock on the public markets.
In 1999, SAS came close to filing an IPO. The company changed course when the stock market crashed after the dot-com bubble of the late 1990s.
Jason Caplain, a co-founder of the venture capital firm Bull City Venture Partners, said it was unusual for a company to announce IPO plans so early. Three years is a long time, he noted, and most companies usually announce their IPO plans much closer to the actual filing.
Caplain said he wouldn’t be surprised if an IPO never happens given how much can change in three years.
“Chances of a SAS IPO within three years? What’s your guess? Mine is sub 5%,” he wrote on Twitter. “Of course I’d love to see it happen.”
Malhotra said a three-year runway could give the company plenty of time to make its finances look more attractive to investors.
“It gives them the time, before they start to do the roadshow (with investors) to figure out the lay of the land for employees and streamline themselves,” Malhotra said.
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate.
This story was originally published July 29, 2021 at 10:47 AM.
