Ellie Mae Ups Offering Price to $17, Could Raise as Much as $55M

Ellie Mae’s secondary stock offering priced higher than expected and at $17 per share, will raise between $48.16 million and $55.36 million, after expenses, for the mortgage technology vendor.

The offering announced Monday, was initially expected to sell at $16.29 per share, but the company said Wednesday that the shares priced at $17 per share—a stark contrast from Ellie Mae’s initial public offering of 7.5 million shares, when it slashed its original $86.25 million target twice before finally raising $45 million in April 2011.

In the follow-on offering, Ellie Mae is selling 3 million shares of stock in addition to an over-allotment of 465,245 shares that could net the company $55.36 million.

In addition, the Pleasanton, Calif.-based software company’s COO, Jonathan Corr, and CFO, Edgar Luce, as well as directors Carl Buccellato and Frank Schultz, will offer a combined 101,638 shares. Ellie Mae will not receive any proceeds from the executive offering, which is expected to raise the group nearly $1.73 million (before expenses) at the offering’s $17 per share price.

William Blair & Co. and JMP Securities are the joint book-running managers of the offering, while Needham & Company, Oppenheimer & Co., D.A. Davidson & Co. and Wunderlich Securities are co-managers. The offering was arranged through a shelf registration filed with the Securities and Exchange Commission earlier this month.

In a supplemental prospectus filed with the Securities and Exchange Commission Monday, Ellie Mae said it intends to use the proceeds from the offering for “general corporate purposes, including working capital, sales and marketing activities, general and administrative matters and capital expenditures.” The funds may also be used for technology and business acquisitions and investments or short-term interest-bearing securities.

Ellie Mae recently moved is stock to the New York Stock Exchange. After the offering, Ellie Mae will have approximately 24.69 million to 25.15 million outstanding shares of common stock, depending on whether underwriters exercise their over-allotment option in full, giving the company a market capitalization of approximately $419.73 million to $427.55 million at a per-share price of $17.

Ellie Mae filled a Form S-3 with the SEC On June 7, detailing a $60 million shelf offering of common or preferred stock, debt securities, warrants or a combination of multiple debt forms and a secondary offering of 1 million shares of common stock that would be offered by existing shareholders.

A shelf offering essentially allows Ellie Mae to register the types of debt or equity it may sell up to three years in the future so when it decides to make an offering, it can execute a deal faster. After the deal announced Monday, Ellie Mae could file an another supplemental prospectus to offer as much as $13.9 million in additional debt or equity, as well as 900,000 of stock owned by existing shareholders.